Rise Of New Age Realty | August 2019 | First Edition

FACE TO FACE

Niranjan Hiranandani Founder & MD, Hiranandani Group and President, National Real Estate Development Council (NAREDCO)

INTERNATIONAL

THE BEST STUDENT CITIES OF 2019

DESTINATION REPORT

Hinjewadi, PUNE POST RERA REALTY RUN

RISE OF NEWAGE REALTY

Editor’s Letter

Publisher Raj Kumar CEO & Business Head Biswaroop Padhi Editor Vinod Behl EDITORIAL Assistant Editor Vishal Duggal Senior Reporter Sujeet Kumar Jha Vishnu Rageev R. Content Research Nivriti Raj Mannu Kantt Photographer Atul Chaudhary CREATIVE & DESIGN Art Director Kumar Mangalam Graphic Designer Manish Gusain Himanshu Rawat Mohd. Ifteekhar ADVERTISING & SALES Vice President Sales Krupal Nayak krupal.nayak@proptoq.com +91 70456 56796 Group Head Anuj Shah anuj.shah@proptoq.com +91 90990 72782 Account Head Monika Kapur monika.kapur@proptoq.com +91 98119 82911 ENQUIRY Editorial editor@proptoq.com Advertising advertisement@proptoq.com Subscription subscription@proptoq.com

Copyright PropTOQ. All rights reserved.

No part of this publication may be reproduced in any form without the written permission of the publisher. All disputes are subject to the jurisdiction of competent courts and forums in PAN india.

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Hope Amid Despair At a time when the disruptive impact of regulatory reforms was fading out and green shoots of recovery were visible in the crisis hit residential realty, the unprecedented liquidity crisis has hit the sector hard, delaying the recovery process.

Reeling under debt, developers are finding it difficult to carry out construction.

Though the government has pumped in some liquidity,yet the system requires 50000-60000 crore more to tide over the crisis. The apex industry body had recommended to Niti Aayog to create stress fund which has not materialised so far. The liquidity problem has been further compounded by NHB's ban on Subvention Scheme- a cheaper source of financing for developers. This will hit housing supply amidst shortage of 1.1 million homes, in turn adversely impacting Housing for All mission.

But then amidst this dismal scenario, there is a definite hope with the government committed to carry forward reforms.It has already come out with a Model Tenancy Act to boost housing supply. It will not just help push fresh supply into the market but also bring a big chunk of the 1.1 million homes lying vacant .The liberalized ECB norms will boost stressed funds. The government is also working on a plan to unlock under utilized government assets to monetise land by way of long term lease to private developers for the purpose of building affordable homes. An to provide connectivity boost, NHAI & NIIF have joined hands to bring big ticket foreign investment in the road sector in order to facilitate NHAI mobilise Rs 75000 crore required for this year.

And thanks to structural reforms, today new asset classes of Cowork and Coliving are already driving growth.

But then the government needs to do a lot more.

It has to make available affordable land parcels to push housing supply. Land is a major barrier to sound infra in peripheral areas where most of the affordable housing supply has to come.

Fast tracking of realty projects stuck in IBC, NCLT litigation, industry status to real estate , rationalizing GST, creating enabling environment for skilling and technology and conducive environment for project approvals will go a long way in putting real estate firmly on the path of a long term sustainable growth.

Vinod Behl

Vinod.behl@proptoq.com vinod.behl

v_behl

vinodbehl

36

FACE TO FACE Niranjan Hiranandani

Founder & MD, Hiranandani Group and President National Real Estate Development Council (NAREDCO) talks about innovative financial solutions needed for realty revival.

RISE OF NEWAGE REALTY

INTERNATIONAL ROUND UP

24

POST RERA REALTY RUN

THE BEST STUDENT CITIES OF 2019 The latest QS rankings of the best cities in the world for university studies confirm London’s outstanding reputation as the best student city for the second consecutive year.

76

CONTENTS AUGUST 2019

GROUND REALTY

DESTINATION REPORT REGULATION

39

62

Residential Real Estate on Way to Transformation The Indian residential market has come out of blue to advance its moderate run in market volumes.

58

Investment Trends

Small and medium NBFCs and HFCs are the new friends of the real estate sector.

66

Hinjewadi, PUNE Spurred by IT giants, infrastructure & connectivity, Hinjewadi, has emerged as a hot residential real estate investment destination.

70

Policy Haryana TDR policy to boost infra development.

87

Realty Etc.

Indian sanitaryware industry looks for GST boost.

Illegal Properties Come Under Money Laundering The government has tightened the anti-money laundering laws by expanding their ambit.

+

Plus

News Line, Pot Pourri, Product Line, News in Numbers and much more‌

FEEDBACK

Many congrats for the launch of new real estate magazinePropTOQ. Well done.

Sunil Aggarwal Founder

Black Olive Ventures

Mr. Jaxay Shah, Chairman, CREDAI unveiling the launch issue of PropTOQ with Editor, Vinod Behl

Heartiest congratulations.

I must compliment you on bringing out a very comprehensive issue of PropTOQ. If the pre-launch issue is so good, one can imagine the next. you have truly raised the bar.

Achal Paul Director

Buzz Communications

The real estate and allied industry lacked a professional, unbiased, slick international class magazine.

Now with PropTOQ and Vinod Behl at the helm, we can expect a great product. The prelaunch issue is a top of the line product, something that the industry can rely upon heavily to guide and debate on important issues. I wish Team PropTOQ all success.

I am glad that we at real estate industry at large will get benefited with your long real estate media experience and look forward to industry insights in your new real estate monthlyPropTOQ. I wish you, your team and your new magazine lot of success ahead.

Dr. Kunal Banerjee

Sushil Mittal

Khalid Jamal

Founder

Chairman & Founder President

Orion PR & Digital Private Limited

BrandChakra

6 | PropTOQ

Association of Certified Realtors India

Thank you for sharing the prelaunch issue of PropTOQ. Not only did it make an interesting read, it also impressed me with its rich layout, unique styling and extremely cogent content. PropTOQ indeed brings in freshness of approach and presentation in B2B publishing.

Director

FEEDBACK

I am impressed with the pre-launch issue of your new magazinePropTOQ. I find the content and quality of the magazine world class. Vinod Behl has been a leader in this field and with his experience as an editor over long time, I am sure this magazine will be a cut above the rest.

I wish PropTOQ team all the very best.

I am positive that your well produced magazine will fill the void that has been long felt in real estate journalism.

I have been in the industry for over 30 years and I can say that with your vast experience, your name will bring lot of confidence and trust in the content you produce and it will be of interest to real estate industry. My best wishes to you all.

Farook Mahmood

Col. Prithvi Nath (Retd.)

Chairman & Managing Director

Director General

Silverline Group, Bengaluru President FIABCI India & Former World President FIABCI

NAREDCO, Haryana

My compliments to you for PropTOQ and your initiative to showcase the realty sector and its peripheral areas. The government's ambition for the country stands well reflected in its infrastructure allocation in the budget.

Of course, the success will lie in policy and project implementation. In such a scenario, your magazine stands well poised to share crucial insights, information and perspectives that will help many of us navigate the future better.

Ravindra Chamaria Chairman & Managing Director Infinity Group, Kolkata

I am very pleased to learn about your new venture and would like to congratulate you for the same. PropTOQ is a well designed advanced product . I am sure you will continue to bring out high quality editions.

Wishing you best of luck and complete success.

PropTOQ is a fantastic initiative with a foundation grounded on strong experience and the superstructure is totally current, modern and digital.

It addresses the concerns and queries and most importantly bridges the huge knowledge gap that exists in the changing realty environment.

Congratulations on bringing out such a good real estate magazine. I am sure under your able leadership, the magazine will provide qualitative and wholesome information , covering all aspects of real estate. My good wishes to you.

Dr Sunit Sachar

Dr Ananta Raghuvanshi

Chairman

Senior VP (Marketing, CRM, Advertisement & PR) Parsvnath Developers

Woman Real Estate Leader

Pradeep Aggarwal Assocham National Council on Real Estate, Housing & Urban Development Founder & Chairman, Signature Global Group

PropTOQ | 7

POTPOURRI

Rental Boost to Housing The government's flagship mission of 'Housing for All is set to get a big boost with the Housing & Urban Affairs Ministry's draft Model Tenancy Act 2019. Aimed at balancing the rights and interests of landlords and tenants, the model law may well help promote higher rental yield, making residential real estate an attractive asset class.

News Maker With just about five years into the real estate business, the Delhi - based Signature Global Group, a leading affordable housing company in India, has made a big distinction by earning the coveted status of top brand in affordable housing. The RICS - Knight Frank Report based on a nationwide survey of home buyers puts Signature Global on number 7 in overall rankings of top 10 affordable housing developers.

Event of the Month

World Bank Drops Amaravati Project The World Bank has declined to extend a loan of $ 300 million to Amaravati Sustainable Infrastructure and Institutional Development Project. This has cast a shadow over this dream project of Chandrababu Naidu, on which already Rs 45000 crore have been spent.

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NAREDCO 15th National Convention August 19 -20, 2019 Hotel Taj Palace, New Delhi

NEWS IN NUMBERS

RESIDENTIAL REAL ESTATE MARKET UPDATE

After years of slowdown, residential real estate market is finally witnessing recovery with pick-up in sales and new launches.

Another positive indicator is a substantial drop in inventory overhang.

3.4

YEARS

Inventory Overhang

to sell in

New Launches

H1 2019 over 3.9 years to sell in H1 2018

11% decrease in

Housing Sales

in H1 2019 over H1 2018

22% increase in SALES

73,049units

in H1 2019 over H1 2018

launched in H1 2019 over 64,080 units in H1 2018

78,247units sold in H1 2019 over 64,080 units in H1 2018

Share of Affordable & Mid Segments Overall 58% of new launches are in affordable and mid-segments

Mumbai

50%

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Bengaluru

75%

Delhi-NCR

33%

Pune

91%

TALKING POINT

MORTGAGE REGULATION A BOON FOR REALTY SECTOR! In a recent regulatory move, the Finance Ministry shifted the control of Housing Finance Companies (HFCs) from National Housing Bank (NHB) and brought it under the purview of Reserve Bank of India and NHB put a ban on subvention scheme. What does it hold for the real estate sector? Industry leaders present their viewpoint.

Ramesh Nair

CEO & Country Head- JLL India

Harsh Roongta

R V Verma

Investment Advisor

Former Chairman, NHB

I believe that NHB's move to put a clamp down on upfront loans under subvention schemes by developers to sell homes though laudable, will have little impact as only less than 10 percent market pertains to subvention schemes and moreover this practice is largely restricted to under construction properties. Also it remains to be seen if NHB can exercise its powers especially when the control of HFCs has been shifted from NHBs to RBI.

At a time when RBI is overhauling the risk management ecosystem for NBFCs, the policy move to shift HFCs from the control of NHB to RBI will ensure that a single regulator will be responsible for entities in the financial system. Notwithstanding the criticism by developers to ban subvention schemes, the move will do away with the risk that currently prevails due to sale agreements loaded against home buyers.

Now that the regulatory function of the HFCs has been reverted to RBI, what will be needed is a better coordination between NHB and RBI on regulatory and supervisory matters to serve the best interests of borrowers and the market. While NHB will have to focus on continuing growth of the mortgage market, RBI needs to recognize the fact that HFCs need to be treated as specialised institutions with specialised regulations.

Sachin Sandhir

Satish Magar

Gulam Zia

The recent policy move to take away the powers of NHB to regulate housing finance companies and hand these over to RBI will ensure that there is a greater parity in regulations for NBFCs and HFCs, This will go a long way in giving the confidence to domestic and foreign investors. This will have major repercussions for a number of HFCs where improper practices have been followed and who have significant asset liability mismatch. However, this regulatory move will help manage any systemic issues and enable RBI to directly give liquidity support to the struggling sector, thereby relieving the sector from some of the stress which it is currently facing.

The crackdown on home loans under subvention scheme could have been avoided as there was not much harm from the scheme.

This move will increase the interest cost for home buyers as builders were paying EMIs for customers for certain period.

Having said that, I don't think there will be any adverse impact on either the liquidity situation of developers or home sales.

Following the move to shift the control of HFCs from NHB to RBI, the RBI's crackdown on subvention s c h e m e s used by the developers will provide a level playing field for all. According to Knight Frank study, 10-12 percent market in top 8 cities is under such schemes covering the buyers of both under construction and ready homes. As such, this will make a dent on the market.

MD, Valocity India

President, CREDAI

ED, Knight Frank India

PropTOQ | 11

*T&C Apply

NEWS LINE

BHUTANI INFRA TO DEVELOP ₹1200 CR PROJECT IN NOIDA

Realty firm Bhutani Infra is investing ₹ 1,200 crore to develop a commercial project in Noida to tap into the rising demand for office space from corporates and co-working players.

After completing about a dozen commercial projects in East Delhi, Ghaziabad and Noida, it is currently developing a commercial project ''Alphathum'' at Sector 90, Noida, comprising about 45 lakh sq ft of built up area.

Of the total area, around 35 lakh sq ft is for office space and seven lakh sq ft for a shopping mall. Rest will have 500 studio apartments.

The office towers are expected to be completed by year-end, while shopping mall and studio apartments are likely to be executed over the next two years.

The total project cost is about Rs 1,200 crore which is being met through internal accruals. The company has adopted both sale and lease model to monetise this project. The average selling price is Rs 8,000 per sq ft. It has already leased 1.5 lakh sq ft area to a coworking player.

BHUMIKA GROUP FORAYS INTO RETAIL REAL ESTATE

Logistics firm Bhumika Group, which handles transportation and warehousing for cement manufacturers, is developing a mixed use project ‘Urban Square' at Udaipur with an investment of ₹ 300 crore. It is constructing over 10 lakh sq ft area in the first phase of the project.

In this project, the company is coming up with a three lakh sq ft shopping mall. It has leased 25,000 sq ft area to Shoppers Stop and 40,000 sq ft to INOX for six-screen multiplex. Marks & Spencer has taken 16,000 sq ft retail space in the mall.The company expects to complete the entire leasing by July next year and give spaces to retailers for fit-outs. The mall will be operational by October 2020.

According

16 | PropTOQ

to

Uddhav

Poddar,

managing director of Bhumika Group, in the first phase, the company is constructing a five-star hotel with 200 keys and has roped in 'Holiday Inn' for management. It is building high-street retail, office space and serviced apartments as well . Aditya Birla Finance Ltd has provided funds for the project.

There are plans to develop more commercial projects in Rajasthan, Haryana and the National Capital Region.

NEWS LINE

PURAVANKARA ANNOUNCES NEW HOUSING PROJECTS

Bengaluru-based real estate company Puravankara Ltd plans to launch 12,500 units in 13 projects spanning 11 million sq ft area this fiscal at a cost of around Rs 3,000 crore. Six projects are expected to be located in Bengaluru, three in Mumbai, two in Pune and one each in Chennai and Kochi. Seven of these projects with 8.2 million sq ft area will be under the company’s Provident brand that caters to mid income customers.

Three projects are planned for the first quarter of financial year 2021, For which approvals are pending. Ten projects in pipeline are under joint venture with land owners and three owned by the company.

During the last fiscal, Puravankara Ltd sold 3,429 units worth Rs 2,098 crore compared to 2,781 units for Rs 1,881 crore in 2017-18.

The company's consolidated net profit went up by 25 per cent to Rs 114 crore during the full 2018-19 fiscal as compared to Rs 91.40 crore in 2017-18. The revenues rose 41 per cent to Rs2,126.72 crore during the last fiscal from Rs 1,504.94 crore in FY18.

The company has so far completed 68 residential projects and commercial

projects spanning 38.47 msft, primarily across the gateway cities of south and west India. The total area under development is 23.08 ms ft.

The total land bank stands at 68.58 m sft.The company has a pan-India presence with projects in Bengaluru, Chennai, Hyderabad, Pune, Mumbai, Kochi, Goa, Kolkata, Coimbatore and Mangalore.

PropTOQ | 17

NEWS LINE

REALTY SECTOR GETS MEGABILLION FUND INFLOWS IN H1 Despite the continuing slowdown in the real estate sector driven mainly by various regulatory changes, the industry saw USD 2.7 billion flowing into the market in the first half of 2019. According to a report by Vestian-FICCI, the momentum of investment in the realty sector between 2015 and 2018 continued in the first half of 2019.

Improvement in infrastructure, roads, and the metro networks coupled with the increased speed of technology implementation is expected to further boost investor interest.

One of the major trends observed in the last decade has been the rise in institutional investment in real estate, particularly PE investments that has been a key factor in keeping the market confident about its revival. Nearly 80 percent of institutional investments are accounted for by PE investors. With 50 percent of total investments, commercial assets have seen highest amount of investments. The investment value in the segment was recorded at USD 14.2 billion during 2015-18, depicting several large-scale deals.

Despite occupying the least share, investment into industrial assets, mainly comprising warehousing and logistics sector, has observed considerable interest in 2018 and 2019. Some of the major deals into the logistics space include Logos India investing nearly USD 100 million in Casagrand Distripark in Chennai and Embassy Industrial Parks pumping around USD 50 million into DRA Projects in Bengaluru.

18 | PropTOQ

NEW HOUSING BROKERAGE FIRM Two years after forming his own venture Anarock after quitting as chairman of global property consultant, JLL, real estate veteran Anuj Puri has launched a new housing brokerage firm-Trespect.

To start with, Trespect will have eight major offices , focusing initially on flats available in primary markets but later expand to secondary market transactions as well.

Trespect is headed by Sunil Mishra, who has 24 years' experience in business building within the real estate, telecom, banking, financial services and insurance (BSFI) and online start-ups domains.

Trespect has also on-board Amit Sinha as Chief Operating Officer. Prior to this, Sinha was Business Head at PropTiger.com.

The new firm will provide end-to-end services to its customers through a tech-driven approach.It will compete with the likes of News Corp-backed PropTiger. com, Quikr Realty, Square Yards, Investors Clinic and Wealth Clinic, etc. in the organised space.

NEWS LINE

DEVELOPERS AT RISK AS CREDIT DRIES UP

India's year-old credit woes that began with IL&FS Group continue as mortgage lenders struggle to roll over debt amid downgrades in credit ratings.

Developers are at risk of going belly-up as mounting stress in the nation’s credit market dries up funding even for those willing to pay decadehigh rates. With the worsening banking crisis, borrowing rates for most developers have surged to the highest in more than a decade, in some cases about 20%. Even at that cost, capital availability is limited.

Shadow banks that lent heavily to developers in recent years are among the worst hit, as the recovery in housing

sales remains tepid amid slowdown in the nation’s economic growth.

Borrowing costs have increased by about four percentage points over the past year and the funds pool for developers is now one-fifth of the previous year’s average.

The cash crunch has raised questions around solvency of real-estate companies, and threatens to push 70% of them out of business in the next two years.

Challenges to paying debt obligations amid a slump in apartment sales might force developers to sell assets, wherein lenders may face haircuts and exposure losses.

There’s hope that measures proposed in the Union budget including lenders offering a partial credit guarantee for the purchase of high-rated pooled assets of sound nonbank finance companies, would help ease the cash crunch.

PropTOQ | 19

NEWS LINE

NOD TO CHANGES IN MASTER PLAN FOR GLOBAL CITY

SUMITOMO INVESTS ₹2238 CRORE IN BKC LAND

The Gurugram administration has approved the amendment to the final development plan of the proposed Global City project.

The amendment paves way for the designation of the project as a mixed land use project, and as a ‘Special Zone’. The district clearance committee also approved the proposal to increase the floor-area ratio (FAR) of the project to 300.

In one of the biggest investments by a foreign firm in the Maharashtra realty sector, Japanese major Sumitomo Corporation has bought a three-acre plot in the prime Bandra-Kurla Complex for ₹ 2,238 crore.

The land for the project was earlier earmarked for a special economic zone (SEZ) and was to be used for only industrial purpose. However, the state government wanted it to be designated as a Special Zone with mixed land use that allowed residential, commercial and recreational facilities in the area.

The land for Global City falls in sectors 36, 36B, 37 and 37B along the Dwarka Expressway. The project will come up in land acquired by the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) in village Harsaru, Gadholi Khurd, Mohammadpur Jharsa and Khandsa.

The amendment, which was approved by the committee chaired by the deputy commissioner also proposes the redesignation of 95.78 acres of land earmarked in transport and communication zone to be considered as “open space”. Another 161 acres land in Manesar, which has been shown as agricultural land, is proposed to be earmarked as “residential” in the Gurgaon Manesar Urban Complex Master Plan.

This project is expected to become an important economic and financial hub on the Delhi-Mumbai industrial corridor.

20 | PropTOQ

The plot belongs to the Mumbai Metropolitan Region Development Authority. The bid, which works out to around Rs 745 crore per acre, is billed as among the biggest in the country in recent times.

The new owner will be permitted to construct an area of 65,000 square metres on the 12,486-sq mt plot (a little over 3 acres) situated in the G Block of BKC. Many more global corporates are expected to show interest in investing in the ever-developing BKC in central Mumbai with easy connectivity to the eastern and western suburbs and south Mumbai.

INFRASTRUCTURE

NIIF EYES $1 BILLION FROM OVERSEAS INVESTORS The National Investment and Infrastructure Fund (NIIF) is looking at raising another $1 billion from external investors.

The NIIF, which is tasked with attracting investments into infrastructure and other key sectors, has already received commitments for $1 billion from a few external investors such as sovereign wealth funds - Abu Dhabi Investment Authority and Singaporean Temasek and will be looking to induct more partners.

To raise the targeted $1 billion, the NIIF will be tapping into both sovereign wealth funds as well as pension funds.The fund has drawn $250 million so far, while another $3 billion has to be arranged from external sources.

The NIIF runs three funds now- a $2.1-billion master fund for key infrastructure sectors, a $2-billion fund for roads along with Spanish company Roadis, and a strategic opportunities fund.

While $200 million has been committed for the ports and logistics platform being operated along with Dubai Ports as part of the master fund, NIIF is also scouting for investments in road projects. It will also be looking at investments in rail and metro projects going forward.

WORLD BANK DROPS AMARAVATI INFRASTRUCTURE PROJECT In a major development, the World Bank has ‘dropped’ the $700-million Andhra Pradesh Amaravati Sustainable Infrastructure and Institutional Development Project that seeks to develop the Greenfield capital of Andhra Pradesh.

The World Bank had committed $300 million out of the total project cost of $700 million. The project, a vision of former Chief Minister, N Chandrababu Naidu, to build a world class capital, is being implemented by the Andhra Pradesh Capital Region Development Authority (APCRDA), which has the mandate to develop the Amaravati capital region. The project, approved last year, was aimed at providing urban infrastructure in designated locations in the capital and supporting the initial development of its institutional and governance structure.

Incidentally, the new Government led by Chief Minister, YS Jaganmohan Reddy, has opposed the new capital from day one of its coming to power.

Though the Bank has not indicated any reason or reasons for dropping the project, protests by affected communities, civil society may have led to the decision. The project report hinted at several environmental risks involved in the implementation. The project report quoted an estimated 21,374 families would be impacted by ‘land assembly processes’ in the capital region.

The Bank arrived at this decision after a series of representations it received from civil society organisations such as Narmada Bachao Andolan and National Alliance of People’s Movements led

by Medha Patkar over the past years, and a complaint to its accountability mechanism, Inspection Panel, by the affected communities.

PropTOQ | 21

MORTGAGE NEWS

NBFC, HFC EXPOSURE TO REALTY DROPS DRASTICALLY

Lending to real estate developers by non-banking finance companies (NBFCs) and housing finance companies (HFCs) fell by almost half from about Rs 52,000 crore in 2017-18 to an estimated Rs 27,000 crore.

NBFC and HFC funding was normal during April-September 2018, but due to the default of Infrastructure Leasing & Financial Services (IL&FS) in scheduled payments in September last, the lending slowed down substantially during the second half of 2018-19.

With banks not willing to fund real estate developers, the dependence of developers on NBFCs/HFCs had increased over the years. But the lending by these players came to a standstill after the default crisis. Rather they focussed more on recovering their dues, fearing default from developers.

Most of them re-organized their asset portfolio leading to lower real estate sector lending.

On the other hand, responsive developers have adapted quickly to the stringent credit norms by injecting financial discipline and hiving off assets/projects. The government has also taken cognizance of the struggling NBFCs and a provision has been made in the Budget to create Rs 1 trillion onetime partial credit guarantee to public sector banks (PSBs).

This will enable PSBs to purchase high-rated pooled assets of financially sound NBFCs with provision for the first loss up to 10 per cent. While this government guarantee would not help clean the NBFC mess, it will provide immediate relief to the sector by restoring confidence among NBFCs.

To fill this gap, the small and medium NBFCs/HFCs have stepped in and they are actively lending in the range of Rs 30-70 crore. However, there is a perceptible decrease in the average lending ticket size after the crisis. NBFCs/HFCs started lending in relatively smaller tranches to developers with better credit record and ability to sell residential units in mid-segment and affordable category.

REPCO SCORES 58% INCREASE IN PROFIT

Repco Home Finance has reported a 58% rise in its net profit at Rs 51.5 crore for the fourth quarter as compared to Rs 32.6 crore in the corresponding quarter last fiscal.

22 | PropTOQ

Total income of the company in Q4 was at Rs 308 crore as against Rs 275 crore, registering a growth of 12% even in the context of macroeconomic and elections related uncertainty. Now that a stable government is in place, which is focused on providing affordable housing for all, Repco expects the demand environment to pick up. The company has taken a number of initiatives and is in the process of taking some more to capture the opportunities that come its way in FY20.

The overall loan book of the company rose 12% to Rs 11,036.8

crore at the end of March 2019.

Loans to the self-employed segment accounted for 54.1% of the outstanding loan book and loans against property product accounted for 18.4% of the same.

The gross non-performing assets (GNPA) improved sequentially to 2.95% as at the end of March 2019 from 3.9% as at the end of December 2018. The capital adequacy ratio stood provisionally at 23.88%, consisting entirely of tier-1 capital. The minimum capital adequacy ratio prescribed by the National Housing Bank is at 12%.

COVER STORY

The post regulatory landscape of real estate has set into motion the process of consolidation with weak , unprofessional and unscrupulous players making way for highly professional, well capitalised and strong players.

POST RERA REALTY RUN

RISE OF NEWAGE REALTY - Vinod Behl

24 | PropTOQ

COVER STORY In the backdrop of landmark structural reforms like RERA, GST and DeMo, today we are seeing the emergence of well regulated new age realty marked by professionalism, transparency, efficiency of scale project management, execution capability, financial discipline, corporate working and good governance. They are branded, listed and corporate companies who are making most of the transformed real estate eco system.

Today under RERA, the paradigm has changed and according to Niranjan Hiranandani, Founder & MD of Hiranandani Group, real estate has become more transparent in sync with enhanced accountability on part of developers as also more structured manner of working which some describe as corporate working. And those who work right will move up the ladder.

Over the years real estate had attracted many big business houses. Even in the pre- RERA period, branded players like Tata, Godrej, Mahindra Lifespaces, Adani, Shapoorji Pallonji , Essar , Bombay Dyeing, Bharti , Peninsula, Hindujas, Hero Group etc were there on the scene. But the new regularity environment has provided them much bigger opportunities to enlarge their footprint.Raymond, according to its CMD, Gautam Hari Singhania is eyeing Rs 4000 crore revenue from the realty business. Not just that the latest to join the real estate corporates bandwagon is Reliance India Limited (RIL) which has chalked out ambitious plans to develop a mega city near Mumbai on the lines of Singapore with port, airport and sea-link connectivity, attracting an investment of $ 75 billion over a decade.

These corporates enjoy great brand equity.

In the current regulated environment they are distinguished from the weak and unprofessional players which further strengthen their brand value. This is clearly evident from a recent pan - India consumer survey conducted by RICS and Knight Frank India wherein Tata, Godrej, Mahindra Lifespaces and Lodha find a place of pride.Considering their presence across many business product verticals beyond real estate, they enjoy high brand awareness as well as visibility. They also score high on product quality, track record, regulatory compliance, transparency, clarity in pricing and after sale service.

PropTOQ | 25

COVER STORY

New regulatory environment has provided much bigger opportunities to branded and corporate players to enlarge their footprint.

Millennials who are highly brand conscious and are extremely discerning and savvy about their investment, prefer branded homes because of their high lifestyle quotient, high grade location, construction quality and project amenities. Even NRIs have great trust in real estate corporates because of their strong financial standing, accountability and timely and efficient execution. Says Seema Harsha, COO, Indiassetz Infra Services, "Since NRIs are geographically cut off, they attach high value to well known, trust worthy and investor-friendly brands". According to Santhosh Kumar, Vice Chairman, Anarock Property Consultants, today branded developers dominate with 53% of new housing supply in H1 2019.

On the other hand in the wake of consolidation, large number of fly by night developers have been forced to leave the market. If one goes by the PropEquity Research, total number of developers in top 9 Indian cities have shrunk by over 50% by 201718. Pradeep Aggarwal, Chairman of Assocham National Council on Real Estate Housing & Urban Development the problem is with the mindset of the developers. They are still in the denial mode. They have to change and come to terms with the changed reality and align themselves with the regulated landscape. Anuj Puri finds it conducive, adding that the elimination of weak links in the chain paves way for financially sound and ethical developers to flourish.

26 | PropTOQ

COVER STORY These weak players who lack financial and execution capability are now joining hands with strong players to complete their stalled projects. As per Anarock, 5.6 lakh units are stuck or delayed across seven cities.

While for smaller players it is their sheer compulsion, for bigger players like Godrej, it is their choice as they have adopted asset light model. "Even PE biggies are joining hands with big branded developers. Though RERA gives level playing field to all, yet corporates have strong brands beyond real estate and investors have strong faith in them. In fact global funds are looking at India as a big market for emerging asset classes", says Anshuman Magazine, Chairman & CEO, CBRE India, South East Asia, Middle East & South Africa.

Another significant trend on New Age realty is tech innovationsPropTech & FinTech whose applications are reshaping the sector,helping in creating and unlocking value in real estate.

Says Sameer Nayar, Promoter, Build Supply, "There will be 20+ billion sft of construction in next decade and to achieve that kind of scale, technology is the answer. It can play a big role in terms of real time material rates, region wise pricing trends, procurement planning, timely delivery, infinite scalability".

Adds Pradeep Aggarwal, "In affordable housing where we need efficiency of scale, technology is already playing key role and we are making use of it to deliver projects ahead of time". D S Mishra, Secretary Ministry of Housing & Urban Affairs says that considering the importance of technology in making homes more affordable, the government is taking steps to promote newer technologies and make them marketfriendly.

NRIs have great trust in corporates because of their strong financial standing, accountability and timely and efficient execution.

Seema Harsha

COO, Indiaassetz Infra Services

PropTOQ | 27

COVER STORY

The elimination of weak and unscrupulous developers will pave the way for financially sound and ethical developers.

Anuj Puri

Chairman, Anarock Property Consultants New Age realty has newer asset classes of CoWorking, CoLiving, Data Centre, Parks, Education, Healthcare, Industrial, Warehousing and Logistics which hold great promise for its growth.

Structural reforms including GST has bolstered demand for logistics and warehousing space that has outstripped supply to clock 38 msf by end 2019. With government's push to Digital India, Make in India and The Data Centre market has doubled in the last three years and is projected to grow one and a half times by 2020 and overall cloud services market is expected to touch $ 4 billion by 2020.

Adani Group has announced an investment of Rs 70,000 crore to set up data centre parks. Hiranandani Group's subsidiary company - Yotta will be making an investment of Rs 15,000 crore to set up data centres.

28 | PropTOQ

COVER STORY

Branded players with high degree of professionalism, streamlined systems and processes go beyond developing property to build brand and create value. This is having positive impact on real estate in terms of good governance and ethical practices. Pirojsha Godrej, feels that growth of real estate corporates and branded players is in the interest of buyers and investors.

Many believe that in the current scenario, the bigger branded players will be able to establish their monopoly.

Anshuman Magazine however does not agree, "Real estate development is a difficult business. It will take time for newer players to catch

up with large branded and corporate players who are in the business for long. Ramesh Nair, CEO JLL believes that in the regulated environment, even the smaller and medium players following good practices and maintaining financial discipline will do well, already, many such players beyond Andheri, Thane, Vashi with good track record are performing well in terms of their access to funding and home sales".

With branded developers including real estate corporates and others adapting and adopting to new rules of the game, new age realty holds great promise and may well turn out to be quite attractive for investors and consumers.

Considering the importance of technology in making homes more affordable, the government is taking steps to promote newer technologies and make them market friendly.

D. S. Mishra

Secretary, Ministry of Housing and Urban Affairs

PropTOQ | 29

CORPORATE VASTU

CREATING A WORKSPACE THAT WORKS FOR YOU

By Nitien Parmar

The road to success is paved with long working hours and a hectic work schedule. Stress, somehow, has become inevitable part of corporate lifestyle.

However, success whether long term or short term, does not come merely from hard work or slogging extra hours. Right environment or ambience too plays a critical part in it. You achieve better productivity when your workspace has a better Vastu arrangement. It provides profound ways to increase wealth potential by identifying key “power spots” in your office.

It is essential to create an energetic, mood elevating but relaxing atmosphere in the office space.

If your company wants to attract good people, good fortune, more prosperity, lucrative business opportunities, you need to work on your work space.

Many successful businessmen have their own belief on how Vastu Shastra

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can bring good fortune, money flow, and success into their business. Vastu leads you to the path to abundance.

It also helps you minimise the turbulence and other conditions distracting you from achieving your business goals.

Vastu has played a major role in the success of top businessmen in India as well as abroad.

Many people ask us why business people request corporate Vastu services.

Our answer is “we help them pay more attention to their energy flow in their business environment so that it leads to better productivity and more profits.” If your space is truly aligned, probably you are now ready to attract new opportunities in business.

CORPORATE VASTU Benefits of Vastu compliant space Maximises opportunities for growth and success.

The productivity of employees rises multifold.

Key employees become super productive as they are able to focus on all creative, innovative and challenging work.

It helps you produce innovative ideas.

Employees are able to work more efficiently with fewer efforts.

With Vastu energy, you can perform at your highest level every day.

It removes barriers from blocking new opportunities coming your way.

Better office Vastu plan has the power to attract even new business clients.

It can prevent decision fatigue.

It creates motivation to work and excel.

Happy and optimistic employees are the product of a joyous environment.

Company is able to attract success instead of chasing success.

No sense of harmony among co-workers who tend to spend their time gossiping.

Important suggestions on Corporate Vastu Square and rectangular shapes indicate wholeness and stability.

Ensure that shape of all furniture and cabins are in harmony. Avoid seating arrangement under the overhead beam.

Surround your office space with objects and symbols which make employees creative and work happily. A blessing Buddha, table crystals, good luck charms, etc. are called energy medicines of the modern times.

Use paintings that depict vitality, force, liveliness, spark, tranquillity, and harmony in the Square and office environment. rectangular A painting of running shapes horses, water stream, indicate rising sun, rocky mountain, etc. wholeness the wonderful and stability. are energy enhancers Ensure that in any working shape of all environment. furniture and Specific types of painting and different cabins are wavelength of various in harmony. colours suggested Avoid seating by Vastu experts arrangement influence the mind as well as personal under the surroundings very overhead positively.

beam.

Company can do the right things at the right time.

Good office Vastu arrangement strengthens the bond between people.

It helps people to complete the project faster.

Impact of defective Vastu Even a smaller project requires lots of time and attention.

Employees tend to miss the deadline for an important job.

They are unable to balance comfort with productivity.

They feel that their life is out of tune with their goal as well as passion.

They feel disconnected from company goals.

It leads to a tired brain, which can’t generate fresh ideas.

There is negative work politics at all levels.

It could lead to chronic illness and burnout among employees.

Plants produce positive vibrations in any environment. A working environment is a place of productive energy, creativity, and innovation. According to Vastu or even Feng Shui, Jade or spiral bamboo plants are like a money magnet. These plants can be placed in lobby, reception and money area of any business location, which are believed to attract prosperity and abundance. They also remove obstacles in financial growth. Placing the right plants at the right location is utmost important. According to scientists, keeping one plant near each computer, Wi-Fi router and also server absorbs harmful radiations.

Sound can be used to improve concentration and focus at work.

It is essential for people who are handling multitask activities.

Music brings their mind, body, and also soul into harmony.

This way you can optimise your space for ultimate business success.

PropTOQ | 31

COWORKING SPACES

METAMORPHOSING REALTY DYNAMICS From just being a concept evolved to provide succour to start-ups, small businesses and freelance professionals, coworking spaces have opened up flexible, lucrative avenues for real estate owners.

Coworking spaces have received tremendous response since their inception. From being just an experimental concept, it has developed into a preferred workspace by working professionals and businesses owing to the multitude of amenities that are offered along-side a well-managed space to carry out your day-to-day operations. Considering the incredible growth rate and acceptance of coworking spaces, one can safely assume that these spaces are not just a ‘sigh of relief’ for professionals who can’t invest in a separate office space, but have opened up newer avenues for the real estate industry.

Traditionally, landlords enjoyed long term revenue and fixed returns on the properties under long-term commercial lease agreement with the tenants. The ideal term for lease agreement was 10-11 years. However, with the influx of co-working spaces, shorter and more flexible agreements are now becoming the trend of the trade. The other shift witnessed by the real estate industry is that previously tenants were keen on renting maximum two floors of the building; whereas today, complete buildings are being rented out by a single tenant. In a situation where a complete building is taken over by a single tenant, the tenant gets benefited in terms of reduced rents and sometimes the landlord allows tenant to renovate the interiors according to his/her requirements.

A drastic alteration that contributed to the multi-fold growth of the retail industry as well as motivated new players to explore the coworking sector, is the shift from fixed rents to revenue share model. Earlier there was a fixed amount payable by the tenant against the use of estate or a part of the property. But since the revenue sharing model came into being, the commercial property owners share a certain percentage of revenues generated by the tenant. The share of revenues depends on mutually agreed terms between both the parties and is set in stone when they sign on the dotted line. Revenue share model has proven to be of dual advantage as both parties get access to a more lucrative deal with tenants getting access to spaces in prime locations at better prices and commercial property owners being able to fill up their vacant spaces.

With the introduction of the concept of management agreements, the real estate

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industry witnessed further growth. Under this type of collaboration, the estate owner is responsible for all the capital investment along with the operational costs. The coworking company is responsible for the overall operational tasks and related work along with the design. In return, the coworking company earns a management fee, generally divided in two parts – the base management fee and incentive fee. Base management fee is a percentage of total revenue and incentive fee is a part of adjusted profits. Sometimes the landlords can bring in experienced operators who take care of the management fees for shared workspace and other related services within the workspace. This will turn out to be advantageous as the coworking space won’t have to look for an operator and will have some benefits in terms of reduction of rental expenditure.

Some coworking start-ups might be hesitant about paying high rents that the estate owners might charge as they are really not sure of the income they will earn. For them a suitable option available is to pay a fixed percentage of their revenues rather than a fixed lease amount. This is called minimum guarantee. Under this agreement of minimum guarantee the amount of rent only increases with the increase in profit.

This is the basic model; however, the terms of agreement differ. Sometimes, the tenant pays a percentage of profit, or it could be a combination of rent and percentage of profit, depending upon the terms of agreement.

To motivate more players to explore the market, the property owners pay majority of initial capital expenditure and the coworking companies are responsible for the operating expenses. Since the property owner brings along the initial investment, he takes a part of profits, preferred returns and then the coworking company owner gets his share of profits. This helps to cut down the monetary investment and thus resulting in more players trying fortune in the coworking industry. This is called as Joint Venture Model.

Analysing the fact that coworking space is not a fad, the real estate owners started to invest in the industry all by themselves. The estate owners start as a franchisee, wherein they are responsible for all the monetary investments and the management of dayto-day operational tasks. Estate owner acts

Sanjay Choudhary

as a franchisee and pays the coworking space owner the franchise fee and annual royalty for using the brand name, member network and technologies. The franchisor, the coworking space owner in order to ensure that the operations and management is capable enough to build up to brand ethics and promises, provides expert guidance, staff training and ongoing support till the operating period. The franchise model will prove to be beneficial for the coworking owners as they will have an extended reach, more properties under the brand name and thereby reducing the competition and increased preference for the brand.

The owner-operator model where either, the coworking space owner purchases the property where its space is located at or the property owner starts a co-working space in the property he already knows. The latter option seems to be more pocket friendly as the cost of running a coworking space is financially effective as compared to the capital investment required to own a property.

With the inception of Real Estate Investment Trusts (REITs) in India, corporate real estate industry has witnessed tremendous growth.

REITs are Security Exchange Board of India (SEBI) approved process that intend to enable more people to invest in the commercial property market. REITs provide a privilege to investors by allowing them to start with a monetary investment of as low as Rs 2 lakh. REITs are advancing growth and transparency in the Indian real estate sector.

Realising the potential in coworking spaces, REITs are now putting enormous resources in creating coworking spaces and coworking spaces also get an opportunity to tie up with these funds and utilise the fund to grow their brand.

Coworking spaces have greatly influenced the dynamics of real estate industry in term of flexibility, reduced term of lease agreements and the pattern followed to lease a commercial property in India. From just being a concept established to sort out the problems for start-ups, small businesses and freelancers, it has also impacted how real estate operates in India.

(The author is Founder and CEO of Incuspaze)

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ARCHITECTURE

DEVISING DISTINCTIVE DESIGNS

Of late, architecture has witnessed a paradigm shift towards trend-setting, definitive designs that have a strong sense of being aesthetically unprecedented and unparalleled

All primary spaces – from residential to commercial complexes – governing the daily lives of individuals, have witnessed diversifying changes that have resulted in the advent of trendsetting designs. The key notion that plays the requisite trick for such arenas, is primarily connected to being exclusive in the design concept that is portrayed and has a strong sense of being aesthetically unprecedented and unparalleled to any other diner of the same cadre.

Every genre of diner has a specific category of audience that it desires to charm, with the incorporated design typology and décor. Thus, it is integral to conclude with the concept and aesthetic appeal as per the admissible crowd. For patrons of opulence, schemes instilled with accents of gold and royal shades of maroon, work the drill; whereas with a bar/pub targeting the millennials, the composition has to impart the essence of ecstasy and euphoria through quirky lights, bold graphical representations and innovation illustrated through the details of design. This primary decision making will assist any architect or designer to lay the first stone of a successful strategy with much ease and competence.

The hospitality sector too has been a part of this paradigm shift, with the evolution of people’s taste towards spaces where they desire to spend moments of frolic or respite.

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Ar. Abhigyan Neogi

Any poignant interior design scheme elucidates its narrative in a distinct language. It does not aim to confuse the user with any supplementary ideas that might astray the accentuation.

For instance, in one of our recently completed projects ‘Kampai’, the theme was required to possess a Japanese neo-classical portrayal.

Every detail instilled in that design complies with this conceived ideology including; the Noren curtains, kosithshu booths and the traditional furniture utilised. Yet another project titled ‘Prankster’ revolves around the reminiscent memories of college days. Hence, spaces that resembled practical laboratories, libraries with lighting formulated in the form of conglomerated books and hostel with bunk beds for furniture; were chosen to be utilised.

and supplement the pictorial buzz on the internet.

Belonging to the ‘Social media’ age, it is almost needless to say that the designed composition should include certain assets that can do its needful rounds in the newsfeed. It may be in the format of a generic ‘Selfie point’ or an arena that requires interaction of the audience with backstage stories.

In the above mentioned project ‘Kampai’, an open sushi counter does the drill. It provides a small sneak peek into the master’s craft while keeping the audience on their toes. ‘Toyroom’, a project of international fame, had pieces of furniture sheathed with miniature mascots of the brand to serve the requisites of the label name

With the increasing number of options becoming available each day to the residents, it is imperative to be able to establish an impactful set-up that remains etched with indelible ink. A well-weaved architectural endeavour, with a concoction of certain glistening factors, is apt brew that works its way through the audience and stands the test of time, with ease.

Along with consolidating all innovative efforts on the integral spaces of hospitality design, it is pertinent to design the connecting spaces like corridors & entrance pathways with an equal amount of intricacy. This aids in maintaining the patron’s interest in the concept even while traversing his way across from one sector to another. LED Lights composed as words on the ceiling of the entrance passage and artistic displays of popartists as wall graffiti, serves as the mentioned ideology in ‘Toy Room’. An efficient planning with apt highlights harmoniously distributed across the entire layout, draws the image of a consistent design panorama, and thus never fails to impress the user.

(The author is a leading architect, known for creating avant-garde design strategies that redefine the façade of modern community life)

FACE TO FACE

Niranjan Hiranandani

Founder & MD, Hiranandani Group and President of National Real Estate Development Council (NAREDCO)

INNOVATIVE FINANCIAL SOLUTIONS NEEDED FOR REALTY REVIVAL

- Vinod Behl

Niranjan Hiranandani has been an industry leader - a real visionary who has established his mark as an iconic real estate developer. He has contributed immensely to the sector both as a developer and as a leader in shaping the government policies for the conducive growth of the sector. Founder & MD, Hiranandani Group and President of National Real estate Development Council (NAREDCO), an apex real estate development body speaks about the challenges and prospects before the sector in the wake of crisis currently gripping it. Excerpts .

How do you see the outlook of real estate sector in view of the current crisis and the progressive policies of the government?

The liquidity crisis has impacted real estate in a big way; it can end up creating a situation where real estate development companies with stalled and delayed projects may end up with proceedings under bankruptcy laws.

This will have a domino effect, and will impact home finance companies and banks; suppliers of construction

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material, consultants who are a part of real estate projects – let us not forget home seekers whose dreams may just come crashing down in bankruptcy proceedings of real estate developers.

The Indian Government has shown positive response to the spiral of problems facing real estate, and we are hopeful that measures will soon be taken to deal with the same.

What more you expect the government to do to fast track the

revival of the sector ?

The government needs to repeat what was done by it post the Lehman Brothers crisis- a one time roll over of debt; as also providing funds to complete stalled and delayed projects.

The real estate industry has been hit hard by the Tsunamis of regulatory, taxation and economic reforms during the first term of Narendra Modi government and it is yet to recover from the same.

FACE TO FACE In the current regulated environment, real estate is expected to head towards greater corporatization. Is there a fear of few big players establishing their monopoly?

Do you expect pecking order of real estate players to change?

I fail to understand the logic of referring to it as, ‘corporatization of real estate’ and the potential result as ‘monopoly’. Under RERA, the paradigm has changed – real estate has become more transparent in sync with enhanced accountability on part of developers, as also a more structured manner of working. Some describe it as the ‘corporate’ manner of working.

Adapting and adopting to the new regulatory regime is not even a choice – it is how business is being done and this is impacting all real estate developers. Those who have adapted to and adopted the new regulatory norms will continue to grow, those who keep holding on to the old systems and methods will find it difficult to survive.It is about those who adapt to the new system continuing to grow while some who do not adapt will probably find businesses other than real estate. I do not see it as establishment of a monopoly.As regards the ‘pecking order’ of real estate players, those who survive in the new regulatory environment will grow to achieve higher levels. It will be a simple matter of those who work right, moving upwards in what is described as the ‘pecking order’.

Going forward, how do you plan to reap in the benefits of regulated realty?

What are the expansion/diversification plans of your group?

We are working across projects in different locations on different segments of real estate. In residential, we have on offer ready possession as also under construction homes, luxury and uber luxury homes for discerning home buyers as also aspirational home buyers. From a scenario where residential was larger in terms of number of units, we are now doing almost equal numbers of commercial – and it is not just about retail and work spaces. We are into co-living, co-working, data centres, warehousing and logistics – all new age real estate for the new age industrial and economic growth story. The ‘integrated township’ model of real estate development has been about ‘walk to work and walk back home’ for corporates – largely office spaces and homes, we have now extended the model to light industrial, warehousing and logistics along with affordable housing for the workforce. Rental Housing has the potential to log major numbers in terms of being ideally suited for investors.

We are already into sub-segments like student rental housing. So yes, the expansion plans are being made into reality.

Rental housing has the potential to log major numbers in terms of being ideally suited for investors.

PropTOQ | 37

FACE TO FACE

Those who adapt and adopt the new regulatory norms will continue to grow and those who keep holding to old systems and methods, will find it difficult to survive.

‘Localization of Data Storage’, it brings us to Data Centres. This is another asset class which has the potential to attract investors in a big way. Similarly, shared working spaces are a big draw for investors. Effectively, the new asset classes have the potential to attract investors in a major way.

The government's flagship mission of 'Housing for All' is facing a challenge . How do you see meeting this challenge?

How do you see the potential of newer asset classes? What are your precise plans in logistics sector?

As the Indian economy undergoes a paradigm change, industries like real estate will have to adapt to the new system of working. Given this scenario, it is no longer residential and office spaces/ shops that exhibit the potential of being asset classes of choice. So, as on-line retailers also

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known as e-tailers are doing good business, they need more warehouse spaces across locations in the country and these will need to dove-tail with logistics. So, we have come up with options to create Warehousing and Logistics Parks in locations like Pune, Chennai and Nashik - this is a new asset class that attracts both, domestic as well as global investors. Then, if we combine ‘Make in India’ with

Yes, there is a challenge of meeting the housing shortfall of 110 million units which requires a massive investment of $ 2 trillion till 2022. Therefore, it is imperative that the government considers bringing in innovative funding mechanism to speed up construction and expedite deliveries.

The scale of investment is huge and together with this, there is a challenge of grappling with the regulatory changes which have brought temporary slowdown. These changes have though adversely impacted the business in the short run, yet these changes will prove to be healthy for the real estate market in the long run. However, in order to tackle the short term crisis, we need innovative financial solutions to infuse liquidity to boost the sentiment and help in sector's revival.

GROUND REALTY

RESIDENTIAL REAL ESTATE ON WAY TO TRANSFORMATION The Indian residential market has come out of blue to advance its moderate run in market volumes in H1 2019 as compared to H1 2018.

This recent movement according to Knight Frank report is well supported by previous and current regime through instrumental policies implementation like RERA (Real Estate Regulation and Development Act), GST (Goods and Services Tax Act) and Benami

Transactions Amendment Act. The steady rate cuts by RBI and reduction in GST rates to 1% for affordable housing and 5% for others has boosted the home buyers’ sentiment. However, the ongoing liquidity crisis of NonBanking Financial Companies (NBFC's) is affecting their lending capacity for home buyers and resulting in funding crisis for developers.

PropTOQ | 39

GROUND REALTY

India Residential Market Snapshot PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

91,739

1,11,175

21%

Sales (Units)

1,24,288

1,29,285

4%

Unsold Inventory (Units)

4,97,289

4,50,263

-9%

QTS

11.3

9.3

-

Note - India numbers represent Mumbai, NCR, Bengaluru, Chennai, Hyderabad, Ahmedabad, Pune and Kolkata The numbers in H1 2019 show that situation is improving.

During H1 2018 – H1 2019, new supply of housing units has increased significantly by 21% (Y-o-Y) to 111,175 units and sales grew steady 4% to 129,285 units (Y-o-Y). It is promising that both sales and supply of housing units has seen growth in this period, predominantly due to developers' focus on affordable housing. The subsidy provided under Housing for All fuelled the sales and supply of residential units.

Another encouraging trend witnessed during the first half of 2019 is that unsold inventory dipped by 9% to 450,263 units in H1 2019 across eight cities like Mumbai, NCR, Bengaluru, Chennai, Hyderabad, Ahmedabad, Pune and Kolkata and inventory overhang also got reduced to 9.3 quarters-to-sell.

The right product sizing & pricing and improving home buyer’s sentiment led to continuous increase in sales and supply.

LAUNCH H1 2018

H1 2019

Mumbai

35,974

43,822

NCR

9,123

7,846

Bengaluru

15,556

Pune

14,100

Chennai Hyderabad

UNITS SOLD CHANGE % (Y-o-Y) 22%

UNSOLD INVENTORY

CHANGE % (Y-o-Y) 4%

CHANGE % (Y-o-Y) 14%

H1 2018

H1 2019

32,412

33,731

-14%

18,047

19,852

10%

1,30,001

-18%

20,894

34%

25,802

28,225

9%

85,387

-14%

21,396

52%

16,451

17,364

6%

31,650

15%

6,523

7,762

19%

8,585

8,979

5%

17,810

-21%

3,706

5,430

47%

8,313

8,334

0.3%

4,265

-67%

Kolkata

6,393

627

-90%

6,591

4,588

-30%

34,575

-11%

Ahmedabad

1,323

3,398

157%

8,087

8,212

2%

10,049

-50%

All India

91,739

1,11,175

21%

1,24,288

1,29,285

4%

4,50,263

-9%

CITY

In the primary market during H1 2019, about 51% of new launches occurred in the price segment under Rs.50 lakhs and 78% under Rs.1 Crore as demand for affordable housing increased and developers focused more on affordable segment. Kolkata residential market experienced severe deflection both in volumes of new supply and sales that decreased by 90% and 30% respectively. This traction is due to procedural delays caused by West Bengal Housing Industry Regulatory Authority (WBHIRA) and over dependence of developers on NBFCs for residential project funding.

The Mumbai residential market on the other hand registered highest sales of 33,731 housing units among all the cities, whereas Bengaluru recorded maximum Y-o-Y growth at 10% during H1 2019. NCR primary market recorded drop in new launch supply units by 14% in H1 2019, probably due to

40 | PropTOQ

H1 2019 1,36,525

weak consumer sentiment and developers focusing more on reducing unsold inventory. Surprisingly, Ahmedabad registered massive surge of 157% in new supply of housing units while, Pune and Hyderabad also grew by 52% & 47% respectively during this period.

The weighted average price across eight cities remained stagnant. The residential prices in Mumbai, Pune and Chennai recorded downward movement of 3%, 4% and 3% respectively on a year-on-year basis. Due to high availability of ready-to-move in inventory, Hyderabad continuously saw the exceptional price growth of 9% Y-o-Y during H1 2019. Mumbai is the lone residential market where increase in unsold inventory by 14% Y-o-Y has been recorded, while Hyderabad saw decline of 67% in unsold inventory.

GROUND REALTY

MUMBAI

NEW CONSTRUCTION GAINS MOMENTUM PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

35,974

43,822

22%

Sales (Units)

32,412

33,731

4%

Unsold Inventory (Units)

1,19,526

1,36,525

14%

QTS

8.0

8.5

-

Wt. Avg. Price (Rs. psf)

7,333

7,115

-3%

The MMR residential market has always been a buyer’s market, well supported with fall in weighted average price of 3% during H1 2019. The new launch supply of residential units in MMR has seen decent surge by 22% during H1 2019 (Y-o-Y). The Year 2017 had witnessed the lowest new launches in decade due to multiple policy level deterrents like RERA, GST and ban on new construction.

Post suspension of ban on new construction, developers are trying to make most of this situation and launching new residential projects.

Thane primary market witnessed maximum number of new launches from some of the country’s prominent corporate developers.

Along with Thane market, Peripheral Western Suburbs and Peripheral Central Suburbs have seen launch of most number of residential units. Smaller unit sizes at low budget and affordable housing continue to lead new launches. Around 52% of new supply during H1 2019 was under budget segment of Rs.75 lakhs and 82% was below Rs.1 crore budget.

GST rate rationalization and general election during H1 2019 impacted overall home buying sentiment, resulting in lower sales. During H1 2019, sales in MMR region grew

merely by 4% Y-o-Y to 33,371 housing units.

Affordable housing dominated the sales in H1 2019 and affordable markets of MMR like Thane, Peripheral Central Suburbs and Peripheral Western Suburbs together grew by 6% Y-o-Y, whereas, sales in luxury BMC markets grew only by 3% Y-o-Y during this period.

Continued price correction encouraged home buyers to purchase apartments in MMR. The weighted average prices in MMR witnessed reduction of 3% in H1 2019 over H1 2018. With the number of new launches overshadowing sales, there is over 14% increment in unsold inventory during H1 2019. Quarter-to-sell (QTS) for MMR market surged from 8 quarters in H1 2018 to

8.5 quarters in H1 2019.

Various infrastructure projects in MMR like highways, roads, sea-link and metro rail are helping in generating positive sentiments among investors and home buyers alike. Some of the metro lines are expected to be completed earliest by 2020 like Dahisar-DN Nagar route and most of works on metro lines across MMR are expected to be completed by 2023. Under construction road infrastructure projects such as Mumbai Trans Harbor Link, Coastal Road, and Navi Mumbai International Airport will improve connectivity and business environment which also expected to drive property sales.

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GROUND REALTY

NCR

LOWER LAUNCHES HIGHER SALES

PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

9,123

7,846

-14%

Sales (Units)

18,047

19,852

10%

Unsold Inventory (Units)

1,57,907

1,30,000

-18%

QTS

17.0

13.0

-

Wt. Avg. Price (Rs. psf)

4,265

4,400

3%

The residential market of NCR is driven by sales and controlled new launches with slight increment in weighted average price. The new launches of residential units in NCR witnessed drop by 14% Y-o-Y to 7,846 units and sales picked up by 10% Y-o-Y to 19,852 units in H1 2019.Liquidity crisis, land litigation issues, allocation of group housing licenses in areas without any infrastructure are dampeners for market sentiment. The pressure of selling unsold inventory is mounting, with home buyers in wait and watch mode.

Residential market of NCR is primarily driven by end-users who are wary of continuous delays in infrastructure projects, delayed delivery of residential projects and recent insolvency proceedings against developers. But despite that buyers trust in RERA is reflected in higher sales and lower inventory.

Unsold inventory, witnessed significant improvement of 18% in H1 2019 and quarters-tosell came down to 13 quarters from 17 quarters in the same period.

Consistent sales

42 | PropTOQ

velocity has helped Gurugram and Greater Noida to emerge as leading performing residential markets of NCR with 11 & 12 quarters-to sell in H1 2019, followed by Noida at 14 and Ghaziabad at 17 quarters.

Minor increment of 3% Y-o-Y of weighted average prices in NCR residential market is observed in H1 2019 over H1 2018. Since 2013 prices of the properties have remained stagnant and developers have been cautious of raising prices due to low sales velocity and lack of investors interest.

Gurugram residential market performed well among all NCR markets due to volume of ready-to-move in properties along Golf Course Extension Road, Southern Peripheral Road and New Gurgaon.

Upcoming and under construction infrastructure projects such as Jewar Airport, Delhi Metro Phase IV, Dwarka Expressway, Gurugram Metro and Delhi Mumbai Industrial Corridor will further boost the market sentiment and regenerate investors interest in the NCR market.

GROUND REALTY

PUNE

NEW LAUNCHES OUTDO SALES

PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

14,100

21,396

52%

Sales (Units)

16,451

17,364

6%

Unsold Inventory (Units)

27,448

31,650

15%

QTS

3.3

3.8

-

Wt. Avg. Price (Rs. psf)

4,460

4,304

-4%

The residential market of Pune remained weak from past few years due to RERA implementation and GST rationalization. In 2018, Pune market tried to recover from low market sentiment through high volume of new launches. However, the growth phase did not sustain and there was substantial fall in new launches from 157% in 2018 to 52% in H1 2019. Developers are launching compact sized low budget homes to beat slowdown.

Affordability of residential units in Pune remain a cause of concern for buyers and to mitigate high price situation, developers are constructing compact houses. Around 94% of new supply during H1 2019 was in the segment of affordable ticket size of Rs.75 lakhs. Sales in Pune residential market grew marginally by 6% Y-o-Y to 17,364 housing units.

Western

region

of

Pune

performed well as compared to other regions. Western region witnessed growth in sales at 15% Y-o-Y followed by the northern markets at 7%.

Demand of housing units in west Pune surged due to increase in office space occupancy. In northern region sales grew due to increase in volume of affordable housing units during H1 2019.

Weighted average prices

for Pune market dipped 4% Y-o-Y during H1 2019.

Unsold inventory in Pune market surged by 15% Y-o-Y to 31,650 during H1 2019 whereas new launches were higher than housing sales. On the back of low sales; inventory overhang increased from 3.3 quarters-to- sell to 3.8 quartersto-sell in H1 2019, which is not a sign of healthy market.

PropTOQ | 43

GROUND REALTY

BENGALURU

ROBUST RECOVERY PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

15,556

20,894

34%

Sales (Units)

25,803

28,225

9%

Unsold Inventory (Units)

98,865

85,387

-14%

QTS

10.7

8.6

-

Wt. Avg. Price (Rs. psf)

4,727

4,821

2%

Post regulatory measures taken by the government over the past 3 years cleaned up and consolidated the market that bounced back on the back of GST rate rationalization, offering property at right price tag with abundance of ready-tomove housing units on offer. Sensing revival post RERA, developers came up with multiple residential projects and market witnessed increment in new launches by 34% Y-o-Y to 20,894 during H1 2019. In year 2018 too market gained in new supply of residential units.

With this continuous new supply, developers have been rewarded with decent sales. In the past two years Bengaluru city has witnessed massive expansion in its boundary mainly on northern and southern peripherals, leading to increase in sales of plotted developments.

Improved buyers sentiment encouraged developers to launch new residential projects despite unsold inventory.

During first quarter of 2019, post reduction in GST rates for affordable housing and redefinition of affordable homes, the demand got boosted which was reflected in new launches of housing units.

Around 41% of total launches in H1 2019 were in the range of

44 | PropTOQ

Rs.25 – Rs.50 lakhs, while Rs.50 – Rs.75 lakhs budget segment accounted for 26% of total launches. In H1 2019, a decent growth of sales of 9% Y-o-Y to 28,225 units was registered over H1 2018. Right pricing, resizing and repositioning of existing residential units to appease new generation home buyers resulted into good sales volume.

South Bengaluru dominated with 40% of total new supply of residential property, followed by southern peripherals like Electronic City, Chandapura, and Sarjapur.

Northern Bengaluru that witnessed greater absorption of leasing in office space over previous year registered traction in residential market also. Eastern

Bengaluru markets were severely hit by construction of Namma Metro in Whitefield and its nearby residential micromarkets. The construction of metro lines and widening of road infrastructure projects are impacting construction of residential projects and delivery of projects on time.

Robust residential market registered significant drop in unsold inventory of 14% Y-o-Y to 85,387 units during H1 2019 from 98,865 units in H1 2018, resulting in reduction in inventory overhang from 10.7 quarters to 8.6 quarters in H1 2019, with weighted average prices gaining by 2% during the same period.

GROUND REALTY

CHENNAI

MODEST GAINS

PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

6,523

7,762

19%

Sales (Units)

8,585

8,979

5%

Unsold Inventory (Units)

22,579

17,810

-21%

QTS

5.7

4.5

-

Wt. Avg. Price (Rs. psf)

4,512

4,377

-3%

Chennai residential market after continuous dismal performance saw a modest signs of recovery in terms of new supply and sales of housing units in H1 2019.

Tamil Nadu Combined Development Regulations (TNCDR) and Buildings Rule, 2019 notification in first quarter of 2019 helped in growth of new launches in Chennai market. In H1 2019 new supply of residential units grew 19% Y-o-Y to 7,762 units over H1 2018. Under these rules, developers got more Floor Space Index (FSI) up from 1.5 to 2 for all types of buildings across the state.

RERA and GST rate rationalization helped in consolidation of market that saw decent growth of sales 5% Y-o-Y to 8,979 units during H1 2019. Most of the sales in H1 2019 mainly happened in affordable category in the range of Rs.30 – Rs.50 lakhs and for ready-tomove projects which do not attract any GST. Southern region of Chennai blessed with higher concentration of office spaces and IT corridors, saw most sales and new launches.

Unsold inventory came down

significantly by 21% Y-o-Y to 17,810 units. However, major factors contributing to this reduction were lesser volume of new launches and developers focus on clearing unsold inventory by offering discounts and freebies. Contraction in unsold inventory revised overall inventory overhang from 5.7 quarters-to-sell to 4.5 quarters-to-sell in H1 2019.

to improve overall sales and uplift the home buyers’ sentiment. The upcoming infrastructure projects like Chennai Peripheral Ring Road, New Terminal and Greenfield Airport, Chennai Metro and Mass Rapid Transit System will further attract investors’ interest and home buyers in Chennai residential market.

Nominal correction of 3% Y-o-Y in weighted average prices of residential properties has been registered in Chennai market during H1 2019 and it is expected

PropTOQ | 45

GROUND REALTY

HYDERABAD

PRICE GAINS

PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

3,706

5,430

47%

Sales (Units)

8,313

8,334

0.3%

Unsold Inventory (Units)

12,749

4,265

-67%

QTS

3.4

1.1

-

Wt. Avg. Price (Rs. psf)

4,012

4,373

9%

The disruption caused by state elections, general elections and Zilla Parishad elections during H1 2019 kept the home buyers and investors in wait and watch mode. The rapid adoption of RERA by developers and GST rate rationalization offered some breathing space for improvement of residential market. On the back of this a significant jump of 47% Y-o-Y increase in newly launched housing units was witnessed. It seems the dull phase is almost over and market recovery can be sensed through steady sales of housing units.

Due to absence of environment committee in the state for over a year, close to 150-200 residential projects are awaiting environment clearance.

In H1 2019, environment committee was in place and as a result of that number of new units launched were higher than previous year. A sizeable number of new launches happened in the budget range of Rs.25 – Rs.50 lakhs segment. Micro-markets such as Kokapet, Bachupally, Tellapur, Bandlaguda, Yapral and Shad Nagar witnessed maximum number of new

46 | PropTOQ

launches in the price category of upto Rs.50 lakhs.

Unlike new launches which is the highlight of H1 2019, sales volume in the same period remained steady.

Western region of Hyderabad registered maximum 63% of total sales of housing units.

It has been observed that ready-to-move housing units or housing units where the delivery of the property was within next few months, were the first preference of buyers.

Significant reduction in unsold inventory volume (67%) has

been witnessed during H1 2019.

The cut in unsold inventory led to dip in inventory overhang in the same period from 3.4 quarters to 1.1 quarters.

However, this resulted into significant improvement in weighted average price by 9%.

The under construction Hyderabad Metro Rail Project and upcoming Regional Ring Road besides various strategic road development programmes will enhance the overall market sentiment of residential market in Hyderabad.

GROUND REALTY

KOLKATA

REGULATORY ROAD BLOCKS PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

6,393

627

-90%

Sales (Units)

6,591

4,558

-30%

Unsold Inventory (Units)

39,054

34,575

-11%

QTS

12.2

11.3

-

Wt. Avg. Price (Rs. psf)

3,293

3,227

-2%

Real estate market of West Bengal is the most unorganized and unstructured market in India due to the absence of central RERA Act 2016. The state follows its own real estate regulatory act called Housing Industry Regulatory Act (HIRA), 2017. With this, state of confusion over real estate regulation prevails. Kolkata’s residential market slowdown is going to continue unless central RERA Act is implemented in the state.

Till June 2019, merely 442 residential projects were registered and approved under HIRA in West Bengal, out of which Kolkata accounts for only 32% of total projects.

Kolkata market is plagued with slowdown in construction, lack of home buyers confidence, and lack of transparency in the system.

The situation in Kolkata residential market has been further dampened by liquidity crisis which surfaced in 2018.

New supply of residential units almost came to standstill because of delay in various clearances for building construction. During H1 2019, only 627 housing units were launched which is a massive

drop by 90% Y-o-Y over H1 2018.

The upcoming metro line construction from Dum Dum to Garia and extension of the EM Bypass have encouraged southern Kolkata market where 50% of total new launches were registered. The adjoining micromarkets like Joka, Sonarpur.

Mahayam Tala and Mukundpur have brighter prospects due to these developments. During H1 2019, around 81% of total supply fell under the budget range of Rs.25 – Rs.50 lakhs and 11% of new supply under budget of Rs.25 lakhs. Residential sales during H1 2019 witnessed drop of 30% Y-o-Y to 4,558 housing units and reached its lowest over the past decade.

As much as 34% of total housing sales have been registered in southern region of Kolkata market due to good traction in affordable housing segment. First time in the last five years, Kolkata’s residential market witnessed decline in unsold inventory by 11% Y-o-Y to 34,575 housing units despite downtrend in overall sales volume. Inventory overhang witnessed decline from 12.2 quarters to 11.3 quarters in H1 2019, which is the sign of recovery in residential market.

The slowdown in Kolkata market and uncertainty over real estate regulation has registered insignificant drop in weighted average prices by 2%.

PropTOQ | 47

GROUND REALTY

AHMEDABAD

HIGHER LAUNCHES LOWER INVENTORY

PARAMETERS

H1 2018

H1 2019

CHANGE % (Y-o-Y)

New Launches (Units)

1,323

3,398

157%

Sales (Units)

8,087

8,212

1.50%

Unsold Inventory (Units)

20,120

10,049

-50%

QTS

7.1

2.5

-

Wt. Avg. Price (Rs. psf)

2,820

2,850

1%

During H1 2019, Ahmedabad residential market generally considered as price sensitive market was mainly driven by affordable housing. Post 2016, Ahmedabad market witnessed substantial slowdown but in H1 2019 new launches grew by 157% Y-o-Y to 3,395 housing units over H1 2018. The volume of new supply of residential units was still low when compared to 2016. Most of the newly launched affordable housing projects are in the eastern and northern region of Ahmedabad.

Sales volume of residential units in Ahmedabad market remain steady and registered improvement of 1.5% during H1 2019 Y-o-Y to 8,212 units over H1 2018, primarily due to various policy measures and cautious home buying decision.

Increase in volumes of new launches and housing sales units are due to infrastructure push by government.

Widening of SG Highway and under construction metro rail will further improve the

48 | PropTOQ

market sentiment. Its benefit will be mainly seen in western part of city which is the hub for office space and residential corridor between SP Ring Road and SG Highway like South Bopal, Ambli Road and Sindhu Bhavan Road where largely working people prefer to stay. Eastern and northern markets of Ahmedabad witnessed around 56% of entire sales within city during H1 2019, These markets are also primarily considered as

affordable housing markets.

There was significant reduction in unsold inventory -50% Y-o-Y to 10,049 units in H1 2019 over H1 2018 with inventory overhang declining from 7.1 quarters-to-sell to 2.5 quarters-to-sell. Reduction in overall inventory overhang is a healthy sign of recovery in the Ahmedabad residential market which has seen a slight movement in price of residential properties.

SPOTLIGHT

HOPE FLOATS FOR STALLED HOUSING PROJECTS The recent judgement of the Supreme Court to cancel the license of Amrapali group of companies and handover the construction of all its incomplete/stalled projects to government company- NBCC, has not just come as a relief to 42000 home buyers of Amrapali who were left stranded by the fraud builder, but it has also raised hopes of hundred thousands of buyers of other stalled projects across India to finally get possession of their homes.

The most significant aspect of this judgement is that home buyers' rights are protected over and above the rights of the government, financial and operational creditors.

Now banks and other lenders including Noida and Greater Noida authorities can not have their claim on the housing units or the land on which they have been fully or partially constructed . That is they have no right to sell the apartments or the land leased out for recovery of their dues.

In short, the home owners have the first right over the asset.

What is equally reassuring for the homebuyers is that the Supreme Court in its order has set up a mechanism to ensure that funds are made

50 | PropTOQ

available to NBCC to complete the pending projects for giving possession to the aggrieved home buyers. For this, the home buyers will have to deposit any outstanding amount in accordance with their contract and the money siphoned by Amrapali will be recovered by taking possession of their properties and putting them on sale.

According to the results of the forensic audit of Amrapali Group done at the behest of Supreme Court, the group had siphoned Rs 3000 crore.

The successful implementation of Supreme Court's order in case of Amrapali will open the doors for the resolution of the problems of 32000 distressed homebuyers of Jaypee Group awaiting

possession of their flats for about a decade,. besides large number of aggrieved home buyers from other projects across the country. Earlier , the Supreme Court had asked the government to find uniform solution for homebuyers of Jaypee Group.

How serious the problem of stalled and undelivered homes across the country is, can be judged from a recent survey by property consultancy Anarock. It says that as many as 1.74 lakh homes across 220 projects worth more than Rs 1.77 trillion are completely stalled and out of these, about 1.15 lakh homes have been sold to homebuyers who have been now left in the lurch.

PROPERTY MANAGEMENT

TECH BOOST TO PROPERTY MANAGEMENT As regulatory compliances and reforms such as RERA and GST promise to safeguard buyers and initiate transparency in India’s real estate market, NRIs are increasingly looking for professional property management companies equipped with state-of-theart technological platforms to manage their assets and provide real time updates on their complete portfolio online.

India is gradually emerging as a rewarding investment destination, attracting nonresident Indians (NRIs) too. But several questions confront an NRI before taking the plunge to invest in India: Who is going to manage my asset? Whom would I trust with my property? Who is going to take care of my tenancy issues? This has held back a large proportion of NRIs from firming up their decision to invest in India.

As a matter of fact, assets need to be looked after and short visits are not sufficient to deal with the locked up property and its maintenance.

Post-2018, the year of consolidation, the realty sector is moving towards revival and has already started showing signs of recovery under the present government that enjoys the perception of being empathetic to real estate sector as well as NRI investors.

There is a humongous opportunity in the realty sector, especially now with so much of change in the ecosystem

brought about by regulatory compliances such as RERA and GST that promise to safeguard buyers and initiate transparency in the market. All these factors have boosted the confidence of NRIs who would want to have at least one property back in India to remain grounded to their roots. This has fuelled the need for professional property management services.

Amit Lalit

Founder & CEO Valion PropCare

While many other industries have stayed current with rapid advancements in technology, real estate industry is still in infancy stage of technological innovation. Gradually, however, we are beginning to see more applications on the AI & Virtual Reality front, popularising the concept of smart homes and offices.

As property management service companies provide online services globally, it is time for aligning real estate sector in India along global trends as only a wider use of technology can bridge the geographical gap while managing the assets and keeping NRIs abreast with real time updates on their complete portfolio online.

With more than 14 years of experience in the real estate market, Valion PropCare provides one- stop solution , specializing in the real estate portfolio management of high networth individuals and NRIs. The company provides end-toend services including complete management on the technology platform (myfollo.com), while identifying and meeting all requirements of NRIs/outstation owners. The property manager assigned by Valion acts on each concern of an owner who is remotely located or wants a professional company to manage his asset in a smooth manner.

Thus the owner can manage his real estate portfolio online with company's technology platform, leveraging transparency in the transaction business (Sell, Rent and Manage).

Inputs by Feba Varaghese Business Head, Valion PropCare

PropTOQ | 51

TREND SPOTTING

LUXURY HOUSING STAGING COMEBACK

- Shajai Jacob

Thanks to keen interest shown by the NRI investors, the Indian luxury property market that has been facing rough weather for quite sometime with severe slowdown in investment from the domestic buyers, is back on track.

52 | PropTOQ

TREND SPOTTING The luxury property segment in India scores high with the NRIs due to their greater buying power. Multiple factors draw the attention of NRIs towards this segment. For one, it promises a high standard of living to them if they chose to return to their country of origin.Also, the rentals can be decent if the property is located in a prominent employment hub. This segment has also not seen the kind of huge unsold inventory that was witnessed in mid-income housing, largely because builders consciously restricted new supply in this segment over the last couple of years.

As per recent research

by ANAROCK Property Consultants, the overall unsold inventory of luxury homes (priced Rs 1.5 crore – Rs 2.5 crore) declined by 12% to 42,650 units in Q1 2019 from 48,300 units in Q1 2018. Bangalore led from the front, recording a significant 49% reduction in unsold luxury stock within a year – from 6,370 units in Q1 2018 to 3,260 units in Q1 2019. Bangalore was followed by Kolkata with a 37% decline in unsold luxury stock, and NCR & MMR each witnessing 7% yearly decline.

Concurrently, unsold stock in the affordable segment saw an increase of nearly 3% as maximum new launches catered to this segment during the period.

PropTOQ | 53

TREND SPOTTING Of late , there has been a concurrent rise in both end-user and investor demand for luxury real estate.

According to Anarock research, returns on investment for luxury homes is higher at 3-5% , compared to 2-3% for ultra luxury homes Historically, NRIs typically bought luxury homes either for good ROI or for their self-use. After a prolonged wait-and-watch period post the recent reformatory changes in the Indian real estate market, the trend is now decidedly skewed towards personal use. As always, they have an eye open for attractive capital appreciation and luxury properties have an edge as the incremental value is higher than affordable or mid-segment properties if prices appreciate.

This may not look handsome at the moment, but HNIs and UHNIs are nevertheless refocusing on this segment for three reasons – NRIs’ predilection towards an aspirational lifestyle and potential for better returns when market rebound meets restricted supply in luxury areas. Moreover, the price points of most luxury properties are at their lowest, with developers additionally offering lucrative deals.

The most convincing incentives for NRIs to invest in luxury and ultraluxury properties being higher potential for capital appreciation for properties located in prime areas and higher and steady cash flow (via rental income) of properties in prime areas as against affordable housing in far-flung areas.

ANAROCK’s recent Consumer Sentiment Survey also indicates that

54 | PropTOQ

28% NRI respondents are looking to buy luxury and ultra-luxury properties (priced INR 1.5 Cr onwards) across cities though the perennial favourite of several NRIs since long, the luxury segment has seen a declining interest post reforms in Indian real estate market with many NRIs hoping for price cuts.

The survey also indicates that 31% NRIs currently prefer to invest in a property in Bangalore. While Bangalore remains the favoured destination for NRIs to invest in luxury real estate, the Mumbai Metropolitan Region is not far behind - MMR has also seen decent new supply in the luxury and ultra-luxury segments over the last 5-6 years.

While the luxury housing segment did not witness major corrections over the last 2-3 years, there was no hike either. Many luxury properties are now selling at their lowest-best prices.

The pricing dynamics for luxury housing vary across the top residential markets. For instance, property prices in luxury and ultraluxury segment in MMR range between INR 40,000-90,000 per sq. ft. on carpet area while in NCR they hover between INR 12,00020,000 per sq. ft. on built-up area. In Bangalore, prices range between INR 7,500-14,000 per sq. ft. on builtup area.

This writers is CEO, GCC(Middle East) Anarock Property Consultants

LUXURY HOMES HOTSPOTS

One major feature distinguishing luxury and ultra-luxury properties between various cities is its price range. For instance, properties priced greater than INR 1.5 crore are considered ultra-luxury in Bangalore while in Mumbai properties priced above INR 4 crore fall into this category.

Bangalore, Mumbai, Hyderabad and NCR have energed as prime luxury housing markets.

Bangalore: East Bangalore localities like Whitefield has seen the highest launches in the ultra-luxury segment (`>INR 1.5 crore), closely followed by the South & North zones.

Mumbai: South Central Mumbai areas (Worli, Lower Parel, Mahalaxmi, Tardeo and Prabhadevi) accounted for 81% of the total 27,000 new units launched in luxury category (priced >INR 4 crore) in MMR since 2013 onwards.

Hyderabad: The city saw launch of nearly 1,920 units in the luxury segment (properties priced above INR 1.5 crore) in 2018 – a 154% rise from 2017. Most of these launches came up in West Hyderabad.

NCR: Gurgaon and Noida are two prominent luxury hubs in NCR. From 2013 till date, the entire region saw the launch of nearly 12,900 units in luxury category (priced >INR 3 crore). Of this, Gurgaon and Noida collectively comprised 87% share 63% in Gurgaon and 24% in Noida.

TREND SPOTTING

NRI INVESTMENTS IN LUXURY REAL ESTATE IN HYDERABAD India has also been comparably resistant to global recessions.

During the last global recession, India was Rakesh Reddy one of the few countries Director, Aparna Constructions which were not adversely affected. NRIs are aware of this fact and prefer investing their foreign currency savings in the growing Indian real estate sector.

Hyderabad is a popular real estate destination with NRIs, primarily due to its developed commercial infrastructure. As more organisations establish their offices in Hyderabad, this creates an enormous job market and an equally big requirement for residential spaces. The city’s pole position as home to many leading IT/ITeS companies has had a direct impact on the city’s immense real estate surge, with luxury properties at the forefront of this growth.

Another key aspect spurring Hyderabad’s ascent to the top of the luxury property market is the tremendous value available without compromising opulence.

Compared to Delhi or Mumbai, luxury homes in Hyderabad are comparably much larger and better equipped for the same price.

Luxury home buyers in Hyderabad demand privacy, customization, sophisticated technology, amenities such as helipads, and professional maintenance. Since Hyderabad is home to IT/ITeS executives that work round-theclock, it is imperative to provide a safe environment at all times.

Luxury properties provide 24/7 monitoring and surveillance, combined with stringent checks on non-residents at all access points of the premises. Buyers can expect reasonable prices for worldclass luxury homes with stateof-the-art amenities in premium localities.

Hyderabad is one of the top home markets in India with high demand.

While much of the demand is fuelled by senior professionals in the IT/ITeS sectors and HNIs from other Indian metros, Hyderabad also figures among the top cities in terms of investments from NRIs.

PropTOQ | 55

TREND SPOTTING NRI property portfolios have largely been based on market cycles and dynamics. The recent slowdown witnessed in the residential real estate market has had builders increase their focus on NRI customers with the hope to revive markets. The lull in domestic sales was further aggravated by demonetisation and other major policy shifts. To attract NRIs, projects were built with the full range of amenities and tended towards luxury living spaces, which have always been the choice of NRI investors. Builders were marketing to NRIs with a host of special offers and features.

Perhaps the most significant impact on NRI investment in Hyderabad has been the implementation of the Real Estate Regulatory Act (RERA).

That protects the interests of home buyers in an efficient and transparent manner.

Although Hyderabad has always been a strong market for NRI real estate investments, stalled projects were a major concern.

Although many projects were being launched regularly, there was no guarantee for completion of projects unless you were dealing with a reputed developer.

The lack of transparency and communication with builders made NRIs apprehensive about investing in real estate despite lucrative returns.

But RERA has streamlined processes and lessens opportunities for project delays. The transparency and accountability amongst builders resulting from RERA has instilled a new level of trust in the market. RERA’s emphasis on consumer protection and standardisation of business practices will only boost NRI's confidence and push investments.

Hyderabad consistently ranked amongst the top cities for quality living, is seeing strong signs of revival.As the market becomes conducive to investment in real estate, NRIs are once again looking to Hyderabad for their investments.

Many areas in Hyderabad are gaining interest from NRIs for their location, connectivity and investment potential.

Both Nallagandla and Chandanagar-

56 | PropTOQ

Miyapur are growing areas that have strategic proximity to the IT and Finance hubs. While Nallagandla is rapidly developing and becoming a residential hotspot, nearby areas including Lingampally and BHEL Township are also gaining interest amongst NRIs. Manikonda and Kondapur are very popular localities as well.

These areas are characterised by their abundance of luxury gated communities, proximity to industry hubs, social infrastructure, and connectivity throughout the city.

Overall, it is an opportune time for NRIs to buy luxury property in Hyderabad. The rate of property appreciation in Hyderabad is much more due to the fast-paced infrastructural development and Increased migration is providing more rental opportunities.

Hyderabad has emerged as a preferred choice for luxury properties due to high rate of appreciation.

Manikonda and Kondapur are hot locations with abundance of luxury gated communities.

BUDGET AT A GLANCE IN FOCUS

Boost to Housing For All

Under PMAY Gramin, a total of 1.5 crore rural homes have been completed in the past five years and another 1.59 crore houses were proposed to be provided to eligible beneficiaries. Over 81 lakh houses under the PMAY-Urban scheme and an additional 1.95 crore houses have been proposed to be provided under the PMAY Gramin.

Model Tenancy Law

The budget proposed a Model Tenancy Law to do away with archaic rental laws and balance the interests of landlord and tenants. This will go a long way in promoting rental housing which in turn will boost Housing For All mission.

Hike in Home Loan Interest Deduction for Affordable Housing The government announced major tax benefits that will help stimulate demand for affordable housing. Interest deduction up to Rs.3.5 lakh for affordable housing (priced at 45 lakh) as against Rs.2 lakh earlier will now be available until March 31, 2020. This will translate into a benefit of around Rs.7 lakh to the middle-class home buyers over their loan period of 15 years.

Push to Infrastructure

The budget made a provision for Rs.100 lakh crore on infrastructure upgradation over the next five years with steps to scale up India’s infrastructure like augmenting 1,25,000 kilometres of rural roads under the Pradhan Mantri Gram Sadak Yojana at a cost of Rs 80,250 crore and creating a national highways grid.

Consideration for TDS on Immovable Property The budget proposed that for the purpose of tax deduction at source from payment made for acquisition of immovable property, consideration shall include other charges in the nature of club membership fee, car parking fee, electricity and water facility fee, maintenance fee, advance fee or any other charges of similar nature which are incidental to the purchase of immovable property.

Liberalized Area Norms for Affordable Housing It was proposed to increase the limit of carpet area from 30 square meters to 60 square meters in Metropolitan regions and from 60 square meters to 90 square meters in non-metropolitan regions to enlarge the scope of affordable housing under PMAY.

Cut in Corporate Tax Corporate tax reduced to 25% for companies with Rs.400 crore turnover.

It will benefit many low and medium sized real estate companies.

PropTOQ | 57

INVESTMENT TRENDS

SMALL SAVIOURS! With bigger players shying away from lending, small and medium NBFCs and HFCs are the new friends of the real estate sector, playing active role in meeting beleagured sector's funding needs amidst liquidity crunch.

58 | PropTOQ

It is important to note that over the years the dependence of developers on NBFCs/HFCs had increased as banks reduced their exposure to them. On the back of continuous shrinkage of bank finance to developers, NBFC funding got a priority because of the lower cost of funds compared to institutional investors. Flexibility in the structuring of payments made NBFCs and HFCs a preferred choice for developers. Thi s is corroborated by the fact that outstanding credit by NBFCs/ HFCs to real estate developers increased by more than 3.5 times to about INR 233,000 cr till FY 2017-18, up from INR 64,000 cr in FY 2011-12.

Default by leading NBFC - Infrastructure Leasing & Financial Services (IL&FS) in scheduled payments led to a liquidity squeeze in the real estate sector since September 2018. Our interactions with the industry indicate that NBFC and HFC funding was normal during April-September 2018.

The period of October-March is considered to be a peak period in lending activities. But, because of the NBFC crisis, the lending slowed down substantially during the above period. In FY 2018-19, net disbursals by NBFCs/ HFCs to real estate developers declined by almost half from INR 52,000 crore in FY 2017-18 to on estimated INR 27,000 crore in FY 2018-19.

INVESTMENT TRENDS The share of the large NBFCs/HFCs accounted for an estimated 5060% of lending to the real estate developers. The lending by these players came to standstill after the default crisis. Rather, they focused more on recovering their dues fearing default from developers.

Most of them re-organized their asset portfolio, leading to lower real estate sector lending. The default crisis also led to a sea change in lending behaviour with stringent credit guidelines in place.

According to JLL report the market's witnessing interesting trends in the real estate funding space, with small and medium NBFCs/ HFCs stepping in to fill the gap that has been created in the market because relatively large NBFCs/HFCs have reduced their funding to real estate developers. An estimated INR 4000 cr has been lent by small and medium NBFCs and HFCs during October 2018 to March 2019.Small and medium players have been actively lending in the range of INR 30- 70 cr, post brief halt after the crisis. There is a perceptible decrease in the average lending ticket size after the crisis.

Previously, most of the lending happened in the ticket size above INR 150 cr; in some cases even higher value loans were sanctioned.

Our interactions with industry sources indicate that an estimated INR 4,000 cr has been lent by small and medium NBFCs/HFCs during October’18 to March’19.

and affordable category.

Funding approval apart from stringent credit norms has been based on the financial strength of the entity and not just a specific project. Lenders are also ensuring that they have adequate security against the money lent in terms of assets and guarantees. Since these lenders do not want to take up too much of risk, small loan amounts are being disbursed.

On the other hand, responsive developers have adapted quickly to the stringent credit norms by injecting f i n a n c i a l discipline in their working. Many of them have de-leveraged by hiving off assets/ projects etc.

For example, in Mumbai, there are several developers beyond Andheri, Thane and Vashi who have been doing business with a very good track record, for which they are also meeting funding requirements.

These developers are locally very well established and can sell their projects.

With the lending ticket size of up to INR 70 crore, medium and small sized NBFCs/ HFCs have lent around â‚š4000 crore to the real estate industry during October 2018March 2019.

Lenders have naturally adopted rigorous lending parameters in the current scenario. Lending has now become selective and demands a lot of financial discipline. NBFCs/ HFCs started lending in relatively smaller tranches to developers with better credit record and ability to sell residential units in mid-segment

However, all is not negative .Though recovery will take time, the new credit discipline will benefit the real estate sector in the medium to long term.

Also, the new government has taken cognizance of the struggling NBFCs.In the latest Union budget, our Finance Minister chose to address this issue by creating a provision of INR 1 lakh crore one-time partial credit guarantee to public sector banks (PSBs). This will enable PSBs to purchase high-rated pooled assets of financially sound NBFCs with provision for the first loss up to 10%. This government guarantee would help clean the NBFC mess and provide immediate relief to the sector by restoring confidence among NBFCs, in turn helping the real estate sector.

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PROFILE

FUTURISTIC APPROACH FOR NEWER MILESTONES

From residential to commercial, industrial, malls, multiplexes, hotels, hospitals and IT complexes, Pune's Vascon Engineers has made its mark with a stamp of innovation and futuristic approach , executing more than 200 projects, spawning construction area of over 50 million sq. ft.

One simple principle guides Vascon’s approach to every project “Understand the customer’s needs and expectations; fulfil the needs and exceed the expectations.” This is how Vascon has been able to strike the right balance between efficient engineering and thoughtful development in project after project, across the country. Vascon Engineers has more than 30 years of experience, conceiving, developing, constructing

and managing varied projects. It is active in multiple sectors including residential, industrial, IT parks, malls and multiplexes, hospitality and community welfare centres, schools and hospitals. Right from its inception in 1986, Vascon has remained committed to applying the art of value-based aesthetics into the science of construction through efficient engineering. The Vascon team is mainly made up of engineers

who are backed up by highly qualified specialists from various fields of management. In addition, from planning and procurement to testing and execution, every Vascon professional follows well documented systems and procedures. Today, Vascon’s achievements range from sprawling factories to premium homes, from glittering malls to towering software parks and classy elegant schools.

Vascon has 360 degree focus on use of technology from project inception to construction to CRM and after sales services.

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PROFILE Vascon has always been a front runner in adopting new technologies. The Company has a 360 degree focus on use of technology from inception of the project to construction to CRM and after sales services. Vascon has also adapted ISO for quality and environment and OHSAS for Occupational health and safety, abiding by the most stringent norms in the industry. With a deep rooted culture of quality and strong construction fundamentals, Vascon looks forward to grow its re p u t a t i o n for on time delivery and customer trust.

Siddharth Vasudevan Moorthy MD, Vascon Engineers Limited

Due to Va s c o n ’s strong EPC p r e s e n c e pan India, it is one of the few companies to have executed various types of buildings such as residential, commercial, industrial, malls & multiplexes, hotels, hospitals, IT complexes to name a few. The company caters to the housing industry with residences in the affordable sector to the ultra-luxury segment. Vascon has a motto of development with conscience.

Quality delivery with a consistent track record of on time delivery makes Vascon stand apart. Not surprisingly, it is one of the most trusted brands in the industry.

With its commitment to excellence for over 33 years and by winning awards in most spheres of work, including national and international awards for construction, HR and marketing to name a few, Vascon has become one of the most respected brands in the industry.

The company fully appreciates the importance of adopting high standards of corporate governance in all operations and processes throughout the group. The key elements in corporate governance are transparency, disclosure, supervision, internal control, risk management, internal and external communications, high standards of safety, accounting , product & service quality.

The company ensures that the board and the management of the company are fully appraised with its affairs , in order to enable them in conducting the affairs efficiently and to meet the company’s obligations to the stakeholders.

It is committed to corporate governance with the objective of generating long-term economic value for all the stakeholders. The company has executed more than 200 projects with construction area of over 50 million sq.ft. and made inroads into government contracts too, delivering consistently high quality standards and timely execution of projects. Repeat orders from clients stand testimony to the value delivered.

Vascon Engineers forayed into the affordable housing segment with its residential project in Pune Vascon Goodlife. The company aims at providing not just affordable, but value homes with a strong focus on nurturing learning and growth making it a first-of-its kind learning infrastructure in a residential project.

The project boasts of amenities for all age groups, such as library, study rooms in each tower, online education room with computers.

The complex is well connected to the Old Mumbai-Pune highway and Mumbai-Pune expressway and is well within close proximity to IT, ITES and Industrial hubs. Vascon Goodlife is located at Katvi, Talegaon which is an upcoming destination that offers multiple opportunities for investment as well as living. Spread across 9.92 acres, the development offers Studio Apartments, 1 BHK and 2 BHK homes in a secure, wellplanned and gated community.

In the pursuit of making it a living space that is comfortable for all residents, it has a multitude of amenities which promise to lend more value to your living.

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DESTINATION REPORT

HINJEWADI, PUNE

A BIG DRAW FOR INVESTMENT Nivriti Raj

Spurred by global IT giants, wide range of infrastructure development and connectivity boost, Hinjewadi, the Silicon Valley of Maharashtra has emerged as a hot residential real estate investment destination.

As a leading IT Hub of Pune, generating annual revenue in excess of Rs 30,000 crore, housing offices of more than 100 Indian and multinational blue chip firms, Hinjewadi has seen its residential markets rapidly matching up to the influx of working professionals.

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DESTINATION REPORT On the back of the Special Township Policy Act, developers with land banks in the area have started developing large integrated residential townships. These townships are targeted mainly at the young IT professionals looking to live and work in the same locality. There are several affordable, mid-range and luxury segment residential projects by developers like Paranjape Scheme, Kolte Patil, Vascon, Kumar, Xrbia, Megapolis, Vilas Javdekar, Godrej Properties and others.

Residential Projects Galore

projects to buyers demand.

Around 79% of residential projects are multi-storey apartments followed by 19.5% residential plots and 1.5% villa projects.

49%

79%

1.5%

and Shapoorji Pallonji Joyville.

Developers are aligning their residential projects like multistorey apartments or township

56.6%

31.3%

Hinjewadi has witnessed supply of over 22,202 residential units of supply with 8,292 unsold units. At the current sales velocity, it is expected to take around 23 months to clear unsold inventory. Due to

Residential Project Types

Multi-Storey Apartment Villa Residential Plot

Unit Types

Supply & Absorption

In the recent past due to influx of IT companies, this micro-market has seen around 100 residential projects from 67 national and regional developers till Q1’2019. Major corporate real estate developers like Shapoorji Pallonji and Godrej Properties have launched several residential projects like Godrej 24, Godrej Elements

19.5%

apartments are of higher choice in Hinjewadi with

Projects Status

2%

10.1%

1 BHK 2 BHK 3 BHK 4 BHK

36.5%

14%

Ready-to-Move in Under Construction New Launch

sluggish real estate market and high inventory level, only 14% of total residential units are new supply. Around 49% of residential units are readyto-move in whereas 36.5% of total units are in various stages of construction. Some of the major residential projects such as Life Republic by KoltePatil Developers, Godrej 24 by Godrej Properties, Shapporji Joyville by Shapoorji Pallonji and Tinsel Town by Kohinoor Group are selling rapidly.

several projects in advanced stages of construction. The price range for multi-storey apartments in Hinjewadi is Rs.4,584/sq.ft to Rs.6,740/sq.ft with the weighted average price being about Rs.5,727/sq.ft.

Majority of residential units’ supply 57% in Hinjewadi is of 2 BHK configuration which is twice that of 1 BHK supply and about 10% of total supply is of 3 BHK homes and rest are others, including duplex and penthouse.

Unit Sizes & Budget Range Hinjewadi as a locality has homes on offer across the entire spectrum. Predominantly, 1 and 2 BHK

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DESTINATION REPORT

Price Trends & Investment Prospects 5,850

5,810 5,273

5,718

5,800

₹ Per Sq. Ft.

5,750

5,751 5,650

5,665

5,684

5,697

5,621

5,700

5,750

5,686

5,689

5,650

5,600

5,550

5,500

Jun'19 May'19 Apr'19 Marc'19 Feb'19 Jan'19 Dec'18 Nov'18 Oct'18 Sept'18 Jul'18 Jun'18 Time

Micro-Market Prices 10,000

5,727

6,624

7,431

9,228

Hinjewadi

Wakad

Baner

Aundh

9,000 8,000

₹ Per Sq. Ft.

7,000 6,000 5,000 4,000 3,000 2,000 1,000 0,000

Micro-Market

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Real estate prices for residential projects have remained more or less stagnant in Hinjewadi in the past one year, with only around 0.5% capital appreciation. As prices have bottomed out, these can now be expected only to move northwards. With more than 100 projects offering homes in the range of Rs. 4,584/sq.ft. – Rs. 6,740/ sq.ft. spanning mid segment to premium offerings, it is a buyers’ market. Rental yields are infact on the upswing, hence it makes sense for buyers to look at ready to move in options in this locality which can be rented out if not meant for self-use.

Compared to adjoining areas like Wakad, property prices at Hinjewadi is 13-15% lower and around 22-24% lower compared to Baner.

DESTINATION REPORT

Rental Outlook Rental Rates 35,000

10,424 - 12,906

14,535 - 18,572

17,802 - 26,140

1 BHK

2 BHK

3 BHK

30,000

₹ Per Month

25,000 20,000 15,000 10,000 5,000 0,000

BHK Types

Owing to a high-volume job market for IT and ITeS industry, homes in Hinjewadi and adjoining areas are very much in demand for renting out. Residential apartments in Hinjewadi enjoy a rental yield of 3.9% per annum which is highly lucrative compared to other localities like Aundh, Baner and Wakad. Demand for semi-furnished apartments is higher compared to fully furnished or unfurnished

apartments. Rent is around Rs. 10,424 – 12,906 per month for a 1 BHK apartment; Rs. 14,535 – 18,572 per month for a 2 BHK apartment, while it hovers around Rs. 17,802 – 26,140 per month for a 3 BHK in 2019.

Annual absorption rates of residential spaces are in the range of 1.75 – 2 million square feet. These figures are expected to grow in the coming 2-3 years on account

Owing to a highvolume job market for IT and ITeS industry, homes in Hinjewadi and adjoining areas are very much in demand for renting out. Residential apartments in Hinjewadi enjoy a rental yield of 3.9% per annum which is highly lucrative compared to other localities like Aundh, Baner and Wakad.

of the momentum that this locality is witnessing in terms of job opportunities in the IT sector and the push by developers to complete projects in the pipeline.

Moreover, with the continuous push to infrastructure including the upcoming Hinjewadi-Shivajinagar metro link, Hinjewadi’s attraction as a prime residential investment destination of Pune will further go up.

PropTOQ View PropTOQ has a favourable outlook in general towards Hinjewadi. Though, it scores low in terms of piped water supply, drainage, sewerage, yet social infrastructure is fast catching up with its growth. Hinjewadi is a good destination for schools, colleges, hotels, hospitals, malls, recreation and entertainment with overall livability of 7.5 out of 10. PropTOQ predicts an upward swing of 5-6 percent in residential property prices in the next 12-18 months, with the rental rates also mirroring the same sentiment.

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REGULATION

ILLEGAL PROPERTIES COME UNDER MONEY LAUNDERING The government has tightened the antimoney laundering laws by expanding the ambit of the “proceeds of crime”, which now include properties and assets created through any criminal activity even if it is not under the Prevention of Money Laundering Act (PMLA).

These crimes will now be considered as relatable offence.

The new amendment has been brought in with the Finance Bill passed in the Lok Sabha recently.

The Finance Bill has amended eight clauses of the PMLA, 2002.

According to Finance Minister Nirmala Sitharaman, explanations are being brought to certain existing clauses to remove ambiguity and confusion. As per the Bill, a person shall be guilty of offence of money laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted in possession, acquisition, concealment or claiming as untainted property.”

Thus, according to the new norms, the proceeds of a crime will include property not only derived or obtained from the scheduled offence, but also that which is directly or indirectly obtained as a result of any criminal activity relatable to the scheduled offence.

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MAJOR CHANGES MADE IN IBC The Union cabinet has cleared major changes to the Insolvency and Bankruptcy Code (IBC) that will enforce a strict 330-day timeline for the insolvency resolution process, including any legal challenges, and uphold secured creditors’ priority right on the sale or liquidation proceeds of bankrupt companies.

The eight amendments to the IBC will also aid decision-making in the case of bankrupt entities such as property developers that have a large number of creditors, including home buyers. IBC currently allows a maximum of 270 days for clearing a resolution plan, but courts have taken the lenient approach of excluding the time spent on legal challenges by various parties from this time frame.

Significantly, the amendments proposed also rework voting rights in the case of companies where there are a large number of creditors such as home buyers and bondholders. According to the new formula, if more than half of these creditors who are present, approve a plan, it will be considered that the entire class of creditors has approved it. The idea is to make decision-making easier even if a large number of them do not take part in voting. It will help in quick decision-making in the case of companies such as Jaypee Infratech Ltd (JIL), in which home buyers have a 58% voting share on the panel of creditors. Home buyers were the biggest source of funds for JIL, more than lenders and deposit holders.

REGULATION

NHB DRAWS CURTAIN ON SUBVENTION SCHEMES In a recent regulatory move, National Housing Bank (NHB) has asked the housing finance companies (HFCs) to stop funding ‘subvention schemes’ offered by builders including in cases where the loans have been sanctioned but disbursements are yet to commence.

The NHB decision follows reports of widespread fraud in such schemes. To attract more buyers for their projects and raise funds for construction, many developers resorted to offering various subvention schemes. In these schemes, the builder took it upon himself to repay the home loan amount on behalf of the buyer for a certain agreed period.

NHB added that loan disbursal should be closely linked to the stages of project construction. HFCs have been asked to monitor the progress of construction of housing projects and to obtain consent of borrower(s) prior to the release of payments to the builder/developer. If a borrower's consent is obtained and funds are released by an HFC, without linkage to the stage of construction, it would be seen as dereliction of duty on the part of the HFC.The NHB directive comes in the backdrop of large number of stalled and heavily delayed projects, HFCs have been asked to monitor the progress of projects and only disburse loan amounts when they can verify this vital aspect to their satisfaction.

However, the NHB move, though wellintentioned, could in many cases have unintended consequence of accentuating the prolonged slump in the realty sector that has hurt all stakeholders, including the home-buyers.

It would impact liquidity in real estate sector and discourage buyers who were largely attracted to a project due to these schemes.

TAMIL NADU FASTRACKS CLEARANCES FOR SMALLER BUILDINGS

Tamil Nadu government has announced that constructions of less than 1,200 sq ft in area awaiting planning permission for more than 30 days will be deemed approved. The move will be applicable to all constructions across TN, including areas under the jurisdiction of Chennai Metropolitan Development Authority (CMDA).

This would largely benefit small projects such as independent houses, whose constructions are stalled due to inordinate delay in obtaining the plan sanction. Under the new system, if applicants provide all documents required for issuing planning permission but there is a delay, it would be considered as deemed sanction.

The development comes in the backdrop of the government launching a regularisation scheme for unapproved plots in 2017. In this context, the new announcement would ease construction in the regularised unapproved plots.

The state government has also eased the norms for obtaining planning permission for industrial buildings for a specified area. Industries constructing buildings within an area of 25,000 sq. ft and not exceeding the height of 18.3 m in approved industrial layouts ,can self-certify the planning permissions. Applicants need not visit any office after filing their documents for the purpose.

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POLICY

NOW CLU THROUGH BIDDING IN GURUGRAM The Department of Town and Country Planning (DTCP) and Gurugram Metropolitan Development Authority (GMDA) have invited bids for granting change of land use (CLU) in new sectors.

Applications have been invited for CLU for recreational facilities used in residential and open space zones, and for dhabas, restaurants, two/three star hotels, five-star hotels, hospitals, dispensaries, nursing homes and clinics in industrial areas.

DEMAND FOR INCREASED FAR District Town & Country Planning department in Gurugram has received a memorandum from a delegation of builders and plot owners in private licenced colonies demanding increase in the floor area ratio (FAR) in the city from the existing 1.98 to 3 and bring it at par with the norms prevailing in Delhi.

Unlike the earlier practice of first-come-firstserved, the GMDA will grant CLU through bidding process from now on. According to the policy, CLU permission for recreational use in residential zones is allowed with a limit of two facilities in a sector spread over more than 200 acres and maximum one such facility in a sector spread over less than 200 acres.

A recreational facility can be a club with a swimming pool, badminton and tennis courts, indoor game facilities and restaurants which are not more than 200 square metres.

Recreational facilities in open space zone can come up in four sectors - 64, 91, 94 and 99 - on a total of 66.67 acres of land. In this area, one can develop mini amusement parks with outdoor game facilities, canteens and related infrastructure. To develop these facilities one needs to have 2-5 acres of land. These facilities need to have designated parking.

In the industrial zone of Manesar, those who have required land can apply for dhabas, restaurants and star hotels. Around 12 dhabas and restaurants may come up in each of six sectors (9-15) of Manesar. Also, around 12 star hotels can come up in these sectors. For dhabas, one needs to have 500-1,000-sqm land, while 1,000-2,000 square metres are required for restaurants.

Similarly, in Manesar sectors 9-15, permission for six hospitals, six dispensaries, 12 nursing homes and 12 clinics will be granted. For hospital, one needs to have 2.5- 5 acres of land, for dispensary land requirement is 1-1.5 acres while for nursing homes and clinics, it is 250500 square metres.

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Ramesh Singla, president, Home Developers and Plot Holders Association, met chief minister Manohar Lal Khattar and District Town Planner, RS Bhath regarding their demand.According to Singla, 1.98 FAR allows coverage of only 66% land due to which it is not possible to construct the additional fourth floor that was recently allowed by the Haryana government.

Plot owners are ready to deposit the required fee or charges fixed by the government to facilitate this change. But officials are wary that increasing the FAR would lead to more construction in a building resulting in taller buildings and increasing an area’s population density, apart from straining the city’s civic infrastructure, which is already overburdened.

MOBILITY

NEW METRO CORRIDORS APPROVED FOR MMR

The Maharashtra Cabinet has approved three new metro corridors for the Mumbai Metropolitan Region (MMR) with a cumulative length of 50 km and a project cost of â‚š24,000 crore.

The Mumbai Metropolitan Region Development Authority (MMRDA) will be the implementing body for the project.

Till date, eight corridors have been sanctioned in the Mumbai region and are in various stages of implementation and one corridor is commercially operational.

The Metro Corridor 10 will be of 11-km and connect to the western suburb of MiraBhayandar at a cost of Rs 5,000 crore. Corridor 11 of 14-km will connect the General Post Office (GPO) in South Mumbai with Wadala in Central Mumbai; the line will be underground and cost Rs 8,000 crore.

The metro link at GPO will boost public transportation as it is next to the Chhatrapati Shivaji Maharaj Terminus, where outstation and local trains terminate. Corridor 12 will connect the eastern suburb of Kalyan with the industrial township of Taloja near Navi Mumbai.

The metro corridors are expected to reduce journey time by 50-75 per cent when compared with road transport. The congestion in local trains is also expected to reduce.

ORBITAL RAIL CORRIDOR TO BOOST CONNECTIVITY The Haryana Orbital Rail Corridor, a double railway line, will soon connect far-flung areas of the national capital region (NCR) like Sonipat and Palwal. It will run along the Western Peripheral Expressway or the KundliManesar-Palwal (KMP) Expressway.

The detailed project report (DPR) was recently approved by the Haryana Rail Infrastructure Development Corporation (HRIDC), which is a joint venture between the Railway Ministry and the Government of Haryana.

The new rail corridor will put the unserved areas of Haryana on the Indian Railways network and will help in easing congestion in the national capital. The 130-km-long corridor will pass through areas like Badli, Manesar and Sohna and will run along the 6-lane KMP expressway, which spans across major cities like Sonipat, Sohna, Manesar, Badli, Bahadurgarh and others. The project is likely to be completed by the year 2023-2024.

The railway line will provide direct connectivity for Gurugram, Faridabad, Ballabhgarh, Palwal, Manesar, Farukhnagar with all the districts of Haryana and will help in boosting the industrial growth of cities around Delhi. The overall capital cost for the Haryana Orbital Rail Corridor including the land cost is expected to be around Rs 4086.08 crore.

The setting up of this rail corridor will trigger a modal shift in the transportation of goods from road to rail. This would reduce the number of trucks plying on the road, which will subsequently reduce pollution, in the form of vehicular emission.

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POLICY

HARYANA TDR POLICY TO BOOST INFRA DEVELOPMENT

To address the problem of lack of roads and civic infrastructure in urban areas where acquisition of land has become a major obstacle due to high cost, the Haryana government has come up with Transfer of Development Rights (TDR) policy to allow land owners to offer their land for development in exchange of development certificate that can be bought by developers to carry out additional construction in their projects as per norms.

According to the Department of Town and Country Planning (DTCP), the land owners whose land has been earmarked for infrastructure projects under the development plan of a sector can apply for the TDR certificates under this policy.

They can surrender their land to the state government to set up critical infrastructure, such as sector roads, green and open spaces, and amenities such as hospitals and schools in exchange of a TDR certificate. The land surrendered under this policy shall be transferred to the government to build

infrastructure.

A TDR certificate refers to the government awarding extra floor area ratio to the land owner for surrendering part of his land for building critical infrastructure. This certificate can be monetised by the land owner by being sold to a developer for construction of additional area as per rules, states the policy.

As per the policy, TDR certificates can be issued for internal sector roads of 30-metre, 24-metre, 18-metre width and those that are part of sectoral plan

road pockets. This is likely to come as a relief for residents of developing sectors in Gurugram, as most of these roads, which were the responsibility of the developers have not been constructed despite the projects becoming operational.

Another relief under this policy is that land can also be surrendered to set up sites such as colleges, hospitals and other amenities that are considered part of external development. Open spaces and green belts, part of the development plan shall also be eligible under this policy.

HOUSING SUBSCRIPTION TO RWAs TO ATTRACT GST As per Finance Ministry’s recent notification, flat owners will have to pay GST at 18 per cent if their monthly contribution to Resident Welfare Association (RWA) exceeds Rs 7,500, and the annual turnover of RWA by way of supply of services and goods exceeds Rs 20 lakh.

In a circular, the Finance Ministry said the exemption from GST on maintenance charges charged by an RWA from residents is available only if such charges do not exceed Rs 7,500

70 | PropTOQ

per month per member. In case the charges exceed Rs 7,500 per month per member, the entire amount is taxable @18 per cent.

In case a person owns two or more

flats in the housing society or residential complex, the ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment owned by him.

POLICY

EXTRA FACILITIES SURCHARGE WAIVER IN NOIDA PROJECTS

STAMP DUTY RELIEF FOR HOME BUYERS IN M.P

The Noida administration has proposed waiving off the 6% surcharge levied on additional facilities such as swimming pool, community centre/ club and gym in group housing projects.

Madhya Pradesh government has slashed collector guideline rates by 20% leading to lower stamp duty.

The administration also proposed 21.5% decrease in circle rates of Noida’s commercial properties, which have found few takers in the last few years. Besides this, a 25% reduction in surcharge on malls and shops with centralised AC was also proposed.

The move is significant as the administration had not increased its circle rate since 2015, and this is the first time the circle rate in commercial area has been reduced. The administration hopes reduction in circle rate and waiving off surcharge would help push investment in the sector.

The circle rates for Dadri, Jewar and Greater Noida, however, have been kept unchanged as the Noida administration feels the development of Jewar Airport, Metro’s Aqua Line, Dedicated Freight Corridor and the Eastern Peripheral Expressway is a positive transition that will draw investment in the region.

The registration charges on property have gone down as a Rs 20 lakh flat will now cost Rs 16 lakh for registry. Moreover, if a person buys a Rs 20 lakh house and gets it registered for the same amount despite its guideline rate being Rs 16 lakh, he will have to pay 8% (3% registration fee and 5% central charge). Earlier, stamp duty used to be computed on a flat at 10.3% rate.

By the present computation, a buyer who used to pay stamp duty of 3,60,500 in the past when the registration fee was 10.3%, now pays Rs 3,26,500 on purchase of a house worth Rs 35 lakh. In case, the house is registered at the actual collector guideline rate only, then also a buyer despite a hike of 2.2% in the registration fee, pays less than in the past.

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POLICY

NATIONAL RETAIL POLICY ON THE ANVIL

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has completed the consultations for formulating a national retail policy as part of its 100-day action plan under the Narendra Modi government. The policy is expected to promote domestic retail, benefiting 6.5 crore small traders in the country.

The department is currently in the process of drafting the policy and will float the draft soon. The main elements of the national retail policy will be promoting ease of doing business, licensing, direct selling, access to funds and matters related to hypermarkets. The policy will also focus on measures to promote the growth of the

72 | PropTOQ

retail sector, increase in digital payments, and reducing the infrastructural bottlenecks.

The draft national retail policy will be put for reviews from all stakeholders, including state governments. The DPIIT had proposed the national retail policy to support domestic trade. According to the action plan, large-scale programme

for capacity building of managers of small businesses would be undertaken to improve productivity.

The department is already in the process of formulating guidelines on e-commerce and, hence, it would be appropriate for the ministry to come out with norms for retail trade.

POLICY

DELHI’S UNAUTHORISED COLONIES SET FOR REGULARISATION

NEW GUEST HOUSE NORMS IN HARYANA

The Centre has sent in a draft note for regularisation of unauthorised colonies in Delhi for feedback among all stakeholders, including the Aam Aadmi Party (AAP) government.

To streamline the functioning of guest houses, the Haryana government has come out with a fresh policy for setting up Guest/Boarding Houses in residential zones across the state. The policy approved by the Department of Town and Country Planning (DTCP) has done away with the restriction of allowing only two guest houses in a sector. However, such establishments would only be allowed to operate on sector service roads to ensure residents are not affected.

Once this draft note is finalised, all residents of such colonies will soon get ownership rights of their properties.

Delhi chief minister Arvind Kejriwal has directed his ministers to agree to “all conditions” that the Union Ministry of Urban Affairs has laid down in its communication for regularisation of unauthorised colonies so that this decade-old issue is resolved at the earliest.

As and when this regularisation policy is enforced, residents of 1,797 unauthorised colonies in Delhi will soon get ownership and transfer rights over their properties. In 2018, the Delhi Economic Survey estimated at least 5.5 million people were living in these colonies. The cut-off date for the unauthorised colony to be eligible will be January 1, 2015.

In the draft Cabinet note, the Centre has suggested a survey to be done by the Delhi Development Authority (DDA) for accurate mapping of the unauthorised colonies and fixing of boundaries. The mapping is also important to assess the presence of a property before the said cut-off date under the proposal.

In the note, the Centre also empowers divisional commissioners of the revenue department of the Delhi government to provide a “one time exemption” with regard to documents for the purpose of registration and for stamp duty, officials said.

Exemption with regard to documents would mean residents would have to produce fewer documents compared to the regular processes of application for ownership and transfer in authorised colonies.

An exemption in stamp duty will mean that even if a property has been sold and purchased multiple times, the stamp duty for registration purpose would be imposed as a percentage of the latest transaction value.

The new rules, notified by the DTCP, also stipulate that guest houses would be allowed only in sectors where all internal and external services have been provided.

Under the new rules, a house/dwelling unit that can be rented as a “Pay and Use facility” irrespective of whether meals are served or not, shall be construed as a Guest/Boarding House. The pay-and-use facility shall be open to the general public for a period of less than one month.

The policy stipulates that permission for running a guest house would be given by the town planning department in private licensed colonies, by the Haryana Shahari Vikas Pradhikaran (HSVP, previously known as Haryana Urban Development Authority, or HUDA) in its sectors, and by the urban local bodies department in municipal areas.

It also mandates that the guest/boarding house will be allowed to run only on a residential plot with an area of 500 square yards (420 square metres). The clubbing of two plots to measure up to 500 square yards (if both plots belong to the same individual) shall also be allowed.

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LAW

COURT RULING ON BENAMI LAW As per the recent ruling of Rajasthan High Court, the Benami Property Act Amendment 2016 cannot be applied retrospectively. The judgement is expected to bring relief to property owners who are being prosecuted under the 2016 Act for the offences allegedly committed before 2016.

It was feared that stringent provisions under the new Act could have an adverse impact on the real estate industry. Investors were fighting against the retrospective implementation of the Amended Benami Act 2016 that came into effect on August 11, 2016.

The issue at the core was tax authorities using the amended Act to attach properties in cases filed before the new Act came into force. Also, the developers who used to buy land earlier in multiple ownership, due to land ceiling issues, were apprehensive of taxman seizing such properties under the new Benami laws.

The court ruling has made

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it clear that authorities concerned will need to examine each case (of property attachment) on its own merits and keeping in view that Act is applicable prospectively.

Properties which have clear titles and have not been transacted with unaccounted money or through benami ways will continue to be transacted in the usual

manner.

However, experts believe that such rulings should not send out a wrong signal to those who have actually been using real estate to park unaccounted funds. It could be seen as a loosening of the noose on benami transactions, which could be counterproductive.

LAW

GREEN CLEARANCE FOR MUMBAI COASTAL ROAD QUASHED The Bombay High Court has quashed the coastal regulation zone (CRZ) clearances granted to the city civic body’s ambitious Rs 14,000-crore coastal road project that would connect Marine Drive area in south Mumbai to suburban Borivali in the north.

The court noted that there was “serious lacuna” in the decision-making process and that the environmental clearance was also required to be taken by the BMC under the Environmental Impact Assessment (EIA) notification issued by the Centre.

UNCERTAINTY MOUNTS OVER PROPERTIES NEAR MONUMENTS

Recently a plea has been filed in the Supreme Court questioning the ASI’s no-objection certificate to construction in properties near Abdul Rahim Khan-iKhanan’s Tomb which is a protected monument situated about 100 meters south of Humayun’s Tomb complex, the world heritage site in Delhi.

Pertinently, any construction within 100 meters of a protected monument is banned since years. The petitioner blamed the ASI for its policy to keep the 100-metre rule flexible on a case by case basis, in contravention of the provisions and intent of Ancient Monuments and Archaeological Sites and Remains Act, 1958. He argued that the 100-meters prohibited area has to be measured from the starting limit of the protected monument that can only be the outermost boundary wall and not any internal wall of the physical structure.

According to the High Court, permission under the Wildlife (Protection) Act, 1972, should also be obtained. The court observed that there was lack of proper scientific study and this has been overlooked by Maharashtra Coastal Zone Management Authority (MCZMA) as well as the Union Ministry of Environment and Forest (MoEF). The bench allowed a bunch of petitions filed by activists, residents and fishermen from the city challenging the project while quashing the approvals granted by various authorities. Simultaneously, it refused the request made by the BMC’s counsel for a stay of the order to appeal in the Supreme Court.

Following this appeal, the apex court has been called upon again to interpret British era laws of 1904 and 1915 on conservation and protection of heritage monuments. An SC bench has agreed to settle the issue of where the 100-metre calculation should start from the monument itself or the outer boundary wall guarding the monument.

Notably, the 2012 ruling by the SC prohibits any construction activity within 100-metre of such a heritage site. However, the Centre had last year decided to change the law to allow development and infrastructure activities within the 100-metre zone.

Now it all depends on Supreme Court’s reading of 100m rule to decide on the fate of thousands of properties located near centrally protected monuments.

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INTERNATIONAL ROUND UP

THE BEST STUDENT CITIES OF 2019 The latest QS rankings of the best cities in the world for university studies confirm London’s outstanding reputation as the best student city for the second consecutive year.

London has retained its position as the world’s best city for students for the second consecutive year thanks to its large number of world-class universities, excellent employment opportunities, diversity of its talented student body as well as positive feedback provided by students about their incredible experiences in the UK Capital.

Tokyo and Melbourne complete top three in the list of 120 cities compiled by global education consultancy firm QS Quacquarelli Symonds, a company focusing on international higher education.

According to the publication, international students prefer cities that are safe and welcoming. Cost of living and quality of education were other major considerations. Students also looked for cities that allowed them to work while studying, highlighting the importance of letting international students work on student visas.

Europe dominates the list of ‘QS Best Student Cities Ranking’, with the German cities of Munich (4th) and Berlin (5th), followed by the French capital Paris (7th) and Switzerland’s Zurich (8th). The Canadian city of Montreal (6th), Australia’s Sydney (9th) and South Korean capital Seoul (10th) complete the top 10.

The United States is home to some of the world’s best educational institutions. But none of the US cities made it to the top ten in this year’s QS Best Student Cities in the world. Canada outpaces its American neighbour with Toronto in 11th place, Vancouver in 16th, and Ottawa in 45th. Boston is ranked the best student city in the United States with its proximity to renowned universities like Harvard, but internationally it’s in 12th place. New York ranked 19th, Los Angeles 25th, San Francisco 35th, and Chicago 41st.

Beijing ranked 32nd, and it is closely followed by Shanghai at 33rd place. The QS Best Student Cities Ranking 2019 highlights each city’s performance across six categories - the number of top-ranked universities, the proportion of a city’s population made up of students, quality of life on offer, job opportunities available after graduation, affordability, and the feedback of the students themselves.

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INTERNATIONAL ROUND UP London is home to leading international higher education institutions and a vibrant cultural life.

According to London Mayor Sadiq Khan, who has been an outspoken campaigner for better student visa offers for students from around the world, the city is open to students and talent from around the world.

Indian students in London registered a hike of 20% in 2017-18, marking an increase from 4,545 in 2016-17 to 5,455 in 2017-18. However, the numbers are still below the mark than could be achieved from a large student market like India due to a less than attractive visa regime which puts some off from

6

applying to the UK. Other British cities featuring in the top 30 are Edinburgh (15th) and Manchester (29th).

According to the rankings, India’s best student city is Bengaluru (81), followed by Mumbai (85), Delhi (113) and Chennai (115) out of a total of 120 cities ranked in the list.

Bengaluru is known as the Silicon Valley of India with a large number of software companies. It is a leading technology exporter, a hotspot for start-ups, and is home to a number of highly reputed research institutions and universities, including the Indian

Institute of Science (IISc) and the Indian Institute of ManagementBangalore (IIMB). It’s one of the most affordable locations in the Best Student Cities index, coming seventh for the affordability indicator thanks to its low cost of living and tuition fees.

The QS website, however, states that Mumbai has climbed 14 places in this year’s Best Student Cities. It attributes the change in ranking to “improved ratings in the desirability and student rank categories, with its buzzing cultural scene, great weather, beaches and entertainment making it probably one of India’s most fun cities.”

5

Montreal

1

8

Berlin

Zurich

London

4

7

Paris

Munich

10

3

Seoul

2

Tokyo

9

Sydney

Melbourne

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VOICES

Renu Sud Karnad

Shaktikanta Das

Hardeep Singh Puri

A key ingredient of a great brand is that the brand should resonate with the expectation of the consumer.

It should be resilient through ups and downs in the business environment and business cycle. Brand HDFC is resilient and resonating well with its consumers.

While there may not be a one - on - one or overnight transmission, it should happen meaningfully, for new borrowers, the rates should start coming down soon.

The Delhi government has been an impediment to regularisation of colonies at every stage. If it were up to Kejriwal, they would not have done it till 2023.

MD, HDFC Ltd.

RBI Governor

The extraordinary speed with which the Government, the MCA and the IBDI acted is restoring the damage to the investment climate, through amendments to IBC is commendable.

The model tenancy act is prospectively applicable and will not affect existing tenancies. Moreover, it remains to be seen to what extend the states will toe the Central Government line.

Shardul Shroff

Anuj Puri

Executive Chairman, Shardul Amarchand Mangaldas

Gulam Zia

ED, Knight Frank India The NHB diktat banning HFC’s to offer loans that involve servicing by builders on behalf of borrowers (subvention schemes) will adversely impact home transaction volumes (including ready homes) in metro cities.

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Union Minister for Housing and Urban Development

Chairman ANAROCK, Property Consultants

Lakshmi Iyer

Krishnan Sitaraman

The pace at which the lending rates have to get cut, they have not seen the same pace as we have seen rate cuts in benchmark rates.

Globally, securitized products are more complex compared with India where the market is evolving and has easy to understand products.

CIO - Debt & Head Products, Kotak Mahindra AMC

Senior Director CRISIL

EVENTS & AWARDS

UNLOCKING POTENTIAL FOR HOUSING

RICS organised a conference on the theme 'Potential Unlocked : A home for everyone'.

With Knight Frank as knowledge partner and Build Supply as technology partner, the conference focused on how regulation, finance, technology and skills are aiding delivery.

Nimish Gupta, Managing Director, South Asia, RICS did the context setting of the conference while Will Myles, Regional MD, APAC - RICS gave the keynote address on international perspective on affordable housing.

The opening session on RERA 2.0 deliberated on the changing face and shape of real estate regulation. The second panel

discussion on 'Making Dreams a Reality' focused on achieving the 'Housing for All' mandate. The third session - Money Matters dwelled on finance as a key enabler.

The last session of the conference'Delivering on the Promise' discussed how professional skills and technology are aiding execution.

Dr Vijay Madan, Chairman, Delhi & Chandigarh RERA gave the valedictory address. The conference also saw the release of two reports by RICS & Knight Frank - 'Affordable HousingKnow Your Customer' and 'Brick by Brick- Moving Towards Housing for All'.

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PROPTECH

DISRUPTECH 2019

TOWARDS TECH DRIVEN FUTURE READY REALTY

India's biggest proptech challenge initiated by Nasscom and global property consultancy, CBRE South Asia designed to identify, mentor and develop the best-in-line real estate technologies , seeks to revolutionize the real estate sector through innovation.

The Nasscom-CBRE collaborated initiative DisrupTech aimed at expanding the footprint of technology in real estate by supporting startups has identified three winners Touchwizard Technologies, XLSYS Technologies and WEGoT Utility Solutions after three stages of evaluation by industry leaders from across sectors.

Envisioned by CBRE India, entries for DisrupTech were divided into four categories: Real Estate FinTech; Sustainability; Agility & Efficiency and Made for India (solutions tailored specifically for the Indian market). DisrupTech 2019 witnessed participation from established and emerging start-ups from across India.

The highest number of nominations came from South with a whopping 44%, followed by North at 25%.

Srikanth Srinivasan, Head Membership, NASSCOM sees this initiative as a step forward towards building a sustainable ecosystem for PropTech start-ups in the country.

India’s PropTech sector, although in its nascent stage, has several factors which are destined to make the country the numero-uno PropTech destination in the world. It is expected

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that by 2030, India will be the third largest real estate market in the world. The shift in progressive real estate developers, investors and start-ups from placing technology at the periphery to the core is already beginning to happen. The future, however, will entail an amalgamation of human skills along with adoption of advanced technology in the real estate that will serve as an unbeatable combination for the growth of PropTech in the country.

According to Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, this platform in India that advocates PropTech, will slowly but steadily move towards creating a truly global experience for consumers in the realty sector. DisrupTech underscores CBRE’s vision of a tech ready real estate sector to make it future ready.

For this purpose,a host of incentives announced in the Union Budget 2019-20 for the Indian start-ups come handy.

DisrupTech witnessed participation from companies across the country and top thirteen entries were selected to present to the juries . These included XLSYS Technologies Pvt

Ltd, WEGoT Utility Solutions Pvt Ltd, Pemimpin Technology, Trustmore Technologies (P) Limited, Buildsupply, Arth Design Build India Pvt Ltd, Touchwizard Technologies Pvt. Ltd, Property Crow Services Pvt Ltd, Agnishudhi, Indriyn Data Analytics Pvt Ltd, Smarter Dharma Sustainable Solutions Pvt Ltd, YardSquare Property Management Private Limited and Magneto Cleantech.

The three winners Touchwizard Technologies Pvt Ltd (PropVR), XLSYS Technologies Pvt Ltd (QwikSpec) and WEGoT Utility Solutions Pvt Ltd (VenAqua) of DisrupTech were felicitated at the ceremony attended by juries, academia, industry leaders and CBRE. As next step in DisrupTech, the three winners will get the opportunity to be mentored by CBRE along with other opportunities during the time frame.

The technologies from the winning start-ups will be given the support needed to strengthen the Indian real estate landscape with innovation driven solutions.

PROPTECH

TECH BOOST TO REALTY SALES Proptech firm Square Yard's Artificial Intelligence (AI) enabled enterprise technology solution, called “Edge” empowers the sales and distribution functions of other real estate entities like developers and large brokerage houses, in India and selected international markets.

The full stack solution gives enterprises access to Square Yards’ proprietary tools and automated workflows for their sales, marketing, transactions, mortgage and post sales service functions.

Incorporating many of the industry’s best practices in this SaaS based offering, Square Yards is making its tech power available for any sales-led organisation to harness, in their scale up path.

The solution aims to equip enterprises with best in class technology, help improve their sales velocity and make them more productive and efficient. It also helps build an additional recurring revenue source beyond core businesses of real estate distribution and mortgages.

As a product, Edge is much more than a traditional CRM because it seamlessly links all the dots in the entire lifecycle of a sale, starting from lead generation and going beyond final closure and mortgage facilitation; something that most other CRMs do not do.

To make complex sales processes easy, Edge employs a series of pre-built real estate workflows, powerful dashboards and a white labelled mobile app to provide full visibility and control of an enterprise’s sales and marketing operations.

Its AI enabled engine anticipates best win probabilities and uses sophisticated Machine Learning algorithms for lead assignments, re-assignments, lead quality scoring and automated follow ups by considering a multitude of inputs such as customer demographics, their relationship history and related contextual information parameters.

Edge also includes modules for complete digitization of workflows for site operations, online inventory booking engines and digital mortgage applications which are integrated with central credit bureaus, identity and income verification services.

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TECHNOLOGY

SUSTAINING THE SOURCE OF LIFE

In the midst of grave water crisis engulfing the urban landscape in India, TRM molecular renewable technology has emerged as the muchneeded solution that offers optimum treatment, purification and re-use of processed water with minimal waste-generation.

Urban areas in the country are in the throes of Bihag Mehta a major water crisis. In cities such as Bangalore, Chennai, and Gurugram, city corporations are not able to provide adequate piped water supply to residential societies. In the absence of permissions for bore-wells, these societies rely on water tankers to fulfil their daily water requirements.

Though these societies have STPs (Sewage Treatment Plants), which to a certain extent purify or separate the water component from the sewage, the purification/filtration of these plants is not much advanced. So, the treated water can only be re-used for flushing and many times this water has a very strong foul smell.

TRM Water Treatment (Molecular Recycling Treatment) Of late, TRM technology has emerged as a complete solution to water treatment. Centaur Energy is one of the leading providers of TRM water treatment through its technical partners in North America.

Molecular renewable technology is an innovative technology that works in a completely different and unique way from the existing water treatment technologies in the world.

With incomparable effectiveness, it inducts the magnetic fields of water in a controlled manner. The ionisation process is carried out in an autocatalysed reaction. The molecules of water are excited, altering the structure of hydrogen bridges, the result is an effective interaction between the water molecules and the substances present in it, which can be categorised as a change or modification in the physicochemical behaviour of the water.

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Advantages of TRM TRM is a simple and easy to install and use treatment process. It is suitable for all volume scales, from small to very large. It is one of the top technologies in terms of cost effectiveness as well as water treatment. The technology provides solution for all type of water needs, such as grey/sewage water etc.

It has high efficiency with a simple treatment and easy operation that increases treatment capacity in modular form. Having low operational and maintenance cost, it adheres to official global standards.

This technology is easy to work with. It has no foul smells and irritating noises. It also provides visual harmony and saves lot of space that is required by existing water treatment plants. It involves minimum generation and disposal of waste and plant performance can be remotely monitored and controlled.

Moreover,conversion of secondary treatment facilities is feasible under this technology, achieving not only savings in investment, but also an increase of up to 3 times in the treatment capacity.

The odours arising from secondary treatment plants do not occur in this type of system, so it is possible to install these plants at shorter distances than traditional plants. The required installation areas are considerably smaller than those used by traditional technology, as an example; its plant can be installed in an area of only 35m2 or less, as needed. The activation of water modifies the behaviour of solids in water, allowing its use as a flocculating agent, thereby recycling the same pollutant and decreasing the generation of waste.

USP & Advantage of Centaur Energy Automation It is an intelligent and profitable solution that provides up to 10% further energy saving by increasing the heating efficiency. The TRM treatment system is adaptable to any requirement that you wish to obtain since its innovative technology promotes 100% use of processed water in such a way that there is no loss and/or rejection during the treatment system, This is because of the high-end technologies the company uses to facilitate rework if required.

It has the capacity of constant adaption to the demand, of incoming or influent water with the exit, economising the chemical product for waste water treatment. Automation is customised, keeping in mind the minute requirements.There is postsale monitoring and control service for clients and they take advantage of the analysis of information from multiple channels in real time.

Case Study There is an interesting case study of a plant at Naval Township of Bangladesh Navy in Dhaka, Bangladesh. The plant has an input capacity of 300 MLD (million litres per day) and output capacity of 285 MLD. The purification levels were so high that we could have 30% of the total volume as drinking water, 50% of the total volume for daily house-hold purpose and 20% of the total volume used for maintaining landscaping.

(The author is Director – Centaur Energy. A qualified aeronautical engineer with dual specialization in aerodynamics & aircraft structures, Bihag’s expertise lies in evaluation of technical, commercial and economic aspects of renewable energy power plants).

POLICY WATCH

BOOST FOR RENTAL HOUSING

MODEL TENANCY ACT 2019 HIGHLIGHTS

Security deposit has been capped to a maximum of two months’ rent in case of residential property, and a minimum of one month’s rent in the case of non-residential property

Following the announcement about new rental act made in the budget, the Model Tenancy Act 2019 unveiled by the Housing and Urban Affairs Ministry, may well turn out to be a real demand booster for rental housing, in turn giving a boost to 'Housing for All. Once formalized and duly adopted by the states, it will put an end to archaic rent laws and protect the interests of both landlords and tenants. The legislation will go a long way in pushing up the residential rental yield . It will encourage investors including NRIs and other foreign investors to invest in residential realty , especially as they were earlier reluctant to do so because of low rental returns and lack of legislation to protect their interests.

The Model Tenancy Act 2019 will supplement the Housing for All mission of the government, considerably narrowing, if not fully bridging the housing shortage. This will stem high vacancy levels of homes as earlier in the absence of a balanced tenancy act, lower yields and high number of legal disputes due to lack of legal protection, landlords were not inclined to rent out

their properties.

As Anuj Puri, Chairman, Anarock Property Consultants puts it- Distorted property rights for lack of sound rental policy, weak rental contract implementation and low rental yields prompt vacancies. As per the 2011 census, 1.1 crore houses (12 percent of the total share of urban housing stock) have been lying vacant. Mumbai has the maximum number of 4.8 lakh vacant units followed by Delhi and Bengaluru with nearly 3 lakh homes each.

But then like RERA, the Model Tenancy Act has some inherent challenges towards its smooth and effective implementation. The act will serve its real purpose only if the states adopt it in its true spirit. We have to wait for its roll out to see if this much awaited policy initiative lives up to its promise.

A heavy penalty for failure to vacate a residential unit - the landlord is entitled to get a compensation of double of the monthly rent for two months and four times of the monthly rent thereafter if a tenant does not vacate the premises after tenancy has been terminated by order, notice or as per agreement.

The landlord cannot indulge in mid-term hike in rentals.

A landlord cannot cut off or withhold essential supplies or services (electricity, water, etc.) under the new Act. The property owner must give prior notice of three months before revising the rent value.

The tenant cannot sublet a part of or the whole property to someone else.

The draft also makes it the landlord's responsibility to rectify structural damages and undertake measures like whitewashing walls and painting doors and windows.

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PROJECT LAUNCH

SPORTING SAGA SHIL THANE, MMR

Dosti Planet North - Phase 4, Dosti Opal There is something for everyone here, with budget and configuration friendly apartments keeping up the promise of living with convenience.

After the successful launch of Dosti Planet North, Phase 2 – Dosti Jade and Phase 3 Dosti Onyx, Dosti Realty has launched of Dosti Planet North Phase 4 - Dosti Opal.

Taking forward the grandeur of Dosti Planet North in this phase, the new tower – Dosti Opal will encompass configurations of 1 BHK & 2 BHK optima homes which have been designed to cater to small and medium sized families. Located in Shil Thane, a rapidly growing location, the project keeps its promise of providing an elevated living experience with the advantage of convenience. There are also 1 BHK, 2 BHK and 3 BHK homes available in the Dosti Onyx and Dosti Jade. So there is something for everyone’s budget.

Dosti Planet North is designed in a self-sufficient manner with a host of outdoor amenities spread across the project including a Multipurpose Lawn, Kids Play Area, Jogging Track, Multipurpose Sports Court, Cricket Area, Outdoor Gym, Amphitheatre, Skating Rink and Adventure Sports Area. Additionally, there is also a luxurious private clubhouse - Dosti Club Royale* adjacent to the project that hosts conveniences including an Indoor Swimming Pool and Kids Pool, Gymnasium, Multi-Purpose Room, Table Tennis, Snooker, Chess and Carom Room, Squash Court, Steam Room, Jacuzzi Room and Multipurpose Sports Court among others with the backdrop of a refreshing environment.

an excellent education in a conducive environment.

Another advantage is its closeness to the business districts in Thane, Thane- Belapur Road that is home to commercial / IT / ITeS companies and Navi Mumbai locations like Airoli, Ghansoli, and Vashi etc. which are prominent commercial / industrial locations. Further, the area’s proximity to a host of commercial/ industrial pockets in and around Shil Phata, such as Rabale, Mahape, Turbe and Taloja is also leading to heightened activity in the region. The road infrastructure surrounding Shil Thane is of high quality with exceptional connectivity to various parts of the city via a strong network of roadways and railways. The proposed Mumbai - Airoli Tunnel and proposed elevated corridor connecting the Eastern Express Highway to Navi Mumbai will be a further boon for residents in the coming years. The proposed additional two lanes for the Shil Phata to Kalyan Road will boost the area’s advantage as a strategic location.

Dosti Opal homes are designed to cater to small and medium sized families.

True to the meaning of advantage of convenience, Dosti Planet North is located at a strategic place where it enjoys excellent connectivity to any part of the city. Presence of basic infrastructure in the form of retail shops within the complex as well as easy connectivity to shopping markets, malls, banks, hospitals, etc, makes it easier for residents to avail their daily requirements. Dosti Foundation ICSE School located adjacent to the Dosti Planet North, offers residents the option of availing

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According to Deepak Goradia - Vice Chairman and Managing Director, Dosti Realty, all the company's projects have one major aim, that is to fulfill every homebuyers’ dream of owning a home in Mumbai city. After the successful completion of Planet North - Phase 1 where we delivered 1100+ homes and the tremendous response received for Dosti Onyx and Dosti Jade, the growing demand has encouraged us to launch Phase 4 Dosti Opal. Shil Thane is emerging as a favoured working as well as housing destination of the MMR region due to its close proximity and ease-free connectivity to all parts of the city.

The well-planned layout of the Dosti Planet North and the convenience of proximity to the Dosti Foundation School which is one of the first ICSE schools developed here also enhance the lifestyle quotient.

PROPTECH PROJECT LAUNCH

PANCHKULA, HARYANA

MOTIA HUYS LUXURY FLOORS Motia group, one of the leading real estate developers of Tricity (Chandigarh, Mohali, Panchkula) has launched its new residential project - Motia Huys in Peer Muchalla, adjoining Sector 20, Panchkula.

With an investment of Rs 65 crores, the realty major is coming up with independent luxury floors and a commercial arcade for the residents in this project.

Spread over an area of 2.5 acres, Motia Huys will offer a total of 147 units on 49 plots. Comprising of affordable 2 & 3 BHK independent luxury floors and a shopping complex over an area of 500 Sq yards, the residential project will have 47 feet wide internal roads and stilt parking. With immaculately designed floors well equipped with all

the modern amenities, the project will offer an unparalleled lifestyle.

Strategically located, Motia Huys has excellent connectivity to Airport Road (Ring Road) and Himalayan Expressway. Having all the modern utilities, it is connected with major hospitals, commercial and educational hubs for hassle-

free living. Along with luxury homes, there is also a commercial arcade in the project to cater to all the basic requirements of the residents. L. C Mittal, Director Motia Group believes that this premium project with great services is set to augment the lifestyle of the entire region.

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REALTY ETC.

INDIAN SANITARYWARE INDUSTRY LOOKS FOR GST BOOST Vinay Jain CEO & President, Grafdoer Sanitaryware

In the backdrop of little support to sanitaryware industry from GST, especially no fresh cut in the tax rates, there is a definite case for substantial reduction in GST rates to boost sanitaryware industry and housing sector. in basic infrastructure like toilet facilities. The current toilet penetration in India is just 60%, which is a matter of concern.The high cost associated with sanitaryware equipment has a lot to do with it.. A substantial reduction in GST for sanitaryware products will encourage people to make arrangements for toilets in their homes/ communities, leading to higher toilet penetration.

The sanitaryware sector has long sought GST Council’s view to reduce GST to 5 % from the existing 18% in an effort to encourage personal hygiene.

However, the hopes got shattered in the recent budget announcement where nothing significant was done to encourage Indian Sanitaryware industry.

Nevertheless , the sector has pinned positive hopes on the government to encourage this sector.

The significant reduction in GST for the sanitaryware products will make them more affordable which will encourage private as well as public infrastructure developers to come up with improved sanitary infrastructure and facilities in the country. This, in turn, will give a much needed boost to government's Swachh Bharat Abhiyan.

India is on way to becoming a superpower but it severely lags behind

Products like taps and other bath ware fittings are taxed at 18% and this leaves very little scope for encouragement when it comes to the adequate implementation of basic sanitary facilities. Thus, reducing taxation will encourage people to install more such products in their homes to improve the sanitation level, making India cleaner and healthier in the long run.

A lot of builders have shown a positive response to the 'Housing for All' flagship programme of the government. They have also sought a reduction in GST rates on building materials including sanitary fittings. Such a reduction will naturally lead to the reduction in the cost of residential projects whose benefits will ultimately be passed on to the end homebuyers in the form of affordable homes.

The government has been considerate enough to cut GST rates on sanitaryware from 28% to 18%. However,there is an urgent need to further cut the tax rates . This will not only improve national sanitation by boosting public restrooms and toilets in homes but also boost affordable housing, leading to realize the goal of "Housing for All".

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ALTERNATE ASSET CLASSES

FALCONLED FUNDING VALUES STANZA AT $300M

The round also saw participation of the company's existing investors including Sequoia Capital, Matrix Partners, and Accel Partners. This is the first tranche of a larger ongoing equity financing round that the company is raising.Stanza Living is also in talks with multiple equity investors to raise additional capital for the current round. The three-year old start-up was valued at $300 million in the current round.The company will be using the fresh capital for organic and inorganic growth measures

including potential acquisitions to strengthen its capabilities.

Stanza Living has collectively raised $16.7 million till date across both equity and debt routes, excluding the current round. Founded by Anindya Dutta and Sandeep Dalmia in 2017, Stanza Living offers managed accommodation for students in cities including, Delhi NCR, Bangalore, Pune, Hyderabad, Chennai, Coimbatore, Indore, Vadodara, and Dehradun.

OYO ENTERS CO-WORKING SPACE WITH INNOV8 ACQUISITION 88 | PropTOQ

Student housing start-up Stanza Living, run by DTwelve Spaces Pvt Ltd, has received commitments worth $50 million in its ongoing growth equity round led by New York-based Falcon Edge Capital.

It currently claims to have around 22,000 beds on its managed housing platform, which is a significant jump from around 100 students when it first raised capital from Matrix and Accel Partners in 2017.

The homes that Stanza Living offers are fully furnished with amenities like housekeeping, internet facilities and added services such as laundry, doctor and a concierge. Its monthly rental charges range from Rs7,000 to Rs 20,000.

Budget hotel chain OYO has announced its entry into the co-working space segment with the acquisition of Innov8, an existing player in that market. The deal size is Rs 180 crore.

OYO Workspaces plans to take a multi-brand approach, and has introduced two other co-working brands Powerstation and Workflo - besides Innov8.

While Innov8 offers premium office space, Powerstation caters to small and medium businesses and Workflo is a more budgetfriendly product.

Through a targeted multi-brand strategy, OYO aim to provide a differentiated experience for coworkers at different price points and help expand access to coworking spaces to more and more businesses and professionals across the country. The price per seat starts at Rs 6,000 and goes

up to Rs. 10,000.

OYO will launch into the segment with around 21 workspaces with 15,000 seats across 10 cities in India. Of these, 16 centres are under the Innov8 brand, in Delhi, Noida, Gurugram, Bengaluru, Chandigarh and Mumbai.

Powerstation has a centre in Gurugram with around 1,000 seats.

Workflo has set up four centres across NCR, Hyderabad and Bengaluru with a hosting capacity of over 1,500 seats.

OYO Workspaces aims to expand its presence to over 50 centres across India by the end of 2019.

ALTERNATE ASSET CLASSES

PLACIO PLANS EXPANSION IN 20 CITIES Housing start-up Placio is targeting 20 cities for its expansion, including Chennai, Coimbatore Vellore, Bengaluru, Nashik, Pune, Mumbai, Chandigarh and Dehradun Placio currently has 3,000 beds across India and in next three years, the company is eyeing about 1,00,000 beds. It is also planning for partnerships with 50 universities with the focus on private universities where the fee levied is quite high and the well-heeled generally enrol as students.

There are three models on which the company is working - lease, upgrade, and operate. If the student housing properties are on campus, then it is leasing the hostel for a long term.

Secondly, the hostels in universities are poorly managed and not matching up with the aspirations of new-age millennials, so it upgrades them. Thirdly, it is tying up with universities directly, and operating their oncampus hostels. If there is a demand for more rooms, it is also creating off-campus capacity.

Recently, the start-up announced its entry into the international market by venturing into the co-living segment with Arabian Link, a Kuwaitbased managed housing company.

COWRKS TO INVEST $25-30M FOR EXPANSION Co-working solutions provider, CoWrks, is investing between $25 million and $30 million to more than double its footprint to 45,000 seats spanning over 3 million sq ft in the next 12 months.

Founded in 2016, CoWrks has been providing workspace solutions for businesses in Bengaluru, Chennai, Mumbai, Delhi NCR and Hyderabad. It has grown its presence from 2,800 seats across 1.6 lakh sq ft in 2016 to 20,000 seats across 1.5 million sq ft today and competes with WeWork, Awfis, IndiQube, Smartworks, Regus, Innov8, among others.

As per estimates, out of 50-60 million sq ft of new absorption of commercial real estate space in a quarter, 10-15 per cent of this space is taken up by co-working solutions providers.

CoWrks will start operations in Pune soon and expand its presence in Mumbai and Bengaluru, which is its largest market. It is looking to adopt the “operator model,� starting with Tier-2 and -3 cities such as Jaipur, Kozhikode, Mangaluru and Belagavi by tying up with local builders.

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COMMERCIAL REALTY

OFFICE REALTY ON THE GROWTH PATH

In the wake of paradigm shift in focus from residential to commercial space, the office market has seen positive movement on the back of strong transaction volume and double digit rental growth. A steady redemption in office market has been witnessed in H1 2019, as supply and transactions registered a decadal high tractions. This according to Knight Frank report has been largely due to slump in residential real estate market following introduction of RERA, resulting in drop in demand and correction in property prices. As a result of this, the market saw shifting of developers and institutional investors to office market.

NEW COMPLETIONS (MN SQ.FT)

TRANSACTIONS (MN SQ.FT)

MARKET OVERVIEW

CITY

H1 2018

H1 2019

CHANGE % (Y-o-Y) -57%

H1 2018

H1 2019

2.9

4.6

CHANGE % (Y-o-Y) 59%

Mumbai

4.4

1.9

NCR

3.6

5.9

64%

3.4

3.8

12%

Bengaluru

3.7

7.6

105%

6.5

8.3

28%

Pune

2.7

1.5

-44%

3.9

3.8

-2.5%

Chennai

0.9

2.6

189%

0.5

0.6

20%

Hyderabad

1.2

0.3

-75%

1.8

1.9

6%

Kolkata

1.7

4

135%

2.7

3.8

41%

Ahmedabad

0.1

-

NA

0.2

0.6

200%

All India

18.2

23.9

31%

21.8

27.4

26%

Office space supply increased by 31% Y-o-Y to 23.9 mn sq.ft from 18.2 mn sq.ft in H1 2019 over previous year. Bengaluru, NCR, Ahmedabad and Hyderabad witnessed positive

movement in office space supply among top eight office markets. Mumbai, Pune and Chennai registered significant downfall in office space supply during H1 2019. Office market

Sector-wise break-up of transactions INDUSTRY

H1 2018

H1 2019

BFSI & Support Services IT/ITeS Manufacturing Other Services

18% 28% 14% 40%

13% 35% 12% 40%

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transaction was notably decadal high in a single period during H1 2019 to 27.4 mn sq.ft due to demand from IT/ITeS and Coworking Spaces.

COMMERCIAL REALTY In past couple of years, IT/ ITes sector’s share in office space absorption has seen downward trend due to global economic slowdown, reduction in spending on IT services, and inclination to insource by European countries and the USA. A recent surge in hiring for high-end jobs in domains such as Artificial Intelligence (AI), Data Science and Data Security has resulted in office space absorption among top eight cities in India. IT/ITeS sector recorded about 35% of total transacted volume during H1 2019 as compared to 28% in the previous period.

BFSI share in total office space transaction witnessed slump from 18% to 13% in H1 2019, due to higher NPAs of banks.

Other services such as Coworking and Ecommerce companies consistently generated demand and exceeded the IT/ITeS, Manufacturing and BFSI transacted volume during H1 2019.

Office Rental Markets 6 MONTH 12 MONTH CHANGE CHANGE 0% 7.5%

CITIES

H1 2019

Mumbai

1,259

NCR

926

2.4%

10.3%

Bengaluru

856

7.5%

13.5%

Pune

777

1.9%

10%

Chennai

640

1.4%

3.5%

Hyderabad

635

1.7%

11.3%

Ahmedabad

517

2.3%

14.3%

Kolkata

393

-14.1%

0.6%

On the back of strong transaction volumes during H1 2019, five out of eight top office markets witnessed double digit rental growth.

Mumbai and Chennai registered decent rental growth of 7.5 % and 3.5% in H1 2019 Y-o-Y respectively, while Kolkata’s rental growth remained flat at 0.6% Y-o-Y. Average rental values across all top eight cities grew by 10% Y-o-Y during H1 2019.

Ahmedabad office market recorded exceptional rental growth of 14.3%, while Bengaluru and Hyderabad office market grew at 13.5 % and 11.3% Y-o-Y respectively.

Positive double digit rental growth during H1 2019 resulted due to strong office space demand that keeps the vacancy rate stable at 13% compared to previous year.

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HOSPITALITY

BEATING THE ODDS

Despite facing the disruptions caused by general elections and grounding of Jet Airways, hospitality sector gave a fairly decent performance in terms of growth. The consolidated performance of hotels during first half of 2019 was satisfactory, where demand and supply of rooms in top 11 cities recorded growth of 3.6% and 4.8% respectively over H1 2018.

According to JLL’s Hotel Momentum India (HMI) H1 2019 report, 9 out of 11 top markets recorded surge in RevPAR (Revenue per Available Room) in H1 2019 over H1 2018. Hyderabad market outperformed other markets in percentage change of RevPAR during first half of 2019 over H1 2018 while Mumbai was RevPAR leader in absolute terms in the same period. Except Ahmedabad all other cities witnessed positive percentage change in ADR (Average Daily Rate) in H1 2019. Bengaluru is the leader in ADR percentage change. Undisputedly, Gurugram during first half of 2019 was leader in AOR (Average Occupancy Rate) percentage change.

Hotel Market Performance

H1 2019 over H1 2018

Ahmedabad

REVPAR AOR ADR CHANGE (%) CHANGE (%) CHANGE (%) -6.8 -2.2 -3.5

Bengaluru

13.3

2.4

9.3

Chennai

3.4

1.6

0.9

Delhi

1.8

0.7

0.7

Goa

-5.5

-5.4

1.9

Gurugram

13

4.7

5.6

Hyderabad

13.4

2.6

9.2

Jaipur

8.8

1.3

6.7

Kolkata

3.1

1.1

1.3

Mumbai

5.2

0.1

5

Pune

1

-2.4

4.5

India

4.2

0.6

3.3

CITIES

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Industry witnessed some major investments, strategic partnerships and acquisition announcements which boosted the sentiment.

Canada’s Brookfield Asset Management bought the Waterstones Hotel and Club Complex including the 100 Key hotel, club and undeveloped land area for Rs.750 Crores. Lemon Tree Hotels Limited’s subsidiary Fleur Hotels signed an agreement to acquire Berggruen Hotels and Marriot International opened its first Tribute Portfolio hotel in Kochi, Kerala. IHCL signed a strategic partnership with Singapore’s sovereign wealth fund GIC to jointly invest approximately Rs.4,000 Crores over three years.

HOSPITALITY

BIG DADDY OF OFFSHORE GAMING & ENTERTAINMENT

The glitz and glamour of Las Vegas & Macau casinos lure visitors from India and all across the world. But now you could enjoy the internationally renowned games right here in India at Big Daddy casino in Goa. The dark, cloudy evenings during monsoon calls for restless, offshore fun. A short drive brings you to the fringes of the Mandovi river dotted with ferries and casino ships . When the sun sets the casinos starts to light up in all yellow. From a distance, the cruise ships that host the casinos starts to glitter.

An opulent red canopied jetty and potent crystal chandeliers hint at the adventure ahead at Big Daddy Casino. A breezy check-in through VIP counters, leading to a boat ride will land you on board the 50,000-sq ft. state-of-the-art Panamanian vessel - Big Daddy Casino. Three decks of unlimited, 24x7 gaming, spread over 114 tables and 1000-plus gaming positions, welcome you in. The experience is enhanced by live and electronic music, ruby red and glitzy gold interiors, professional assistance and a bevy of East European beauties who help you find your feet.

A unique blend of gaming and high living comes together to create a holistic night out experience for the

consummate traveler at Big Daddy.

As a leader of its own space with curated entertainment experiences, state of the art technology, luxury finish, gourmet experiences to delight F & B aficionados, along with chic Las Vegas inspired Cigar Lounges.

Big Daddy is split into five levels.

On the ground floor is the largest gaming hall, stuffed with roulette tables, electronic stadiums and every gambling activity known to man. The layout is fluid withmore traditional stations prefacing modern variants.

As the excitement builds up guests moves to the second and third levelsthe former for high stakes gaming and standalone card rooms, the latter for VIP gaming with bespoke services.

During monsoon in Goa, as it is off season, everything becomes cheaper than the usual rates. Starting from the flight tickets to accommodation, everything easily fits in your budget.

Plan a Goa trip during this monsoon to avail offers at low prices.

There is 'Daddy's Kids' a safe and secure zone for children with a variety of activities like supervised movie screenings, indoor video games, playstations (PSP) and nanny services,for easy access to families.

The fourth floor of the casino opens to a sprawling restaurant and entertainment zone-Aish-O-Rum that offers multi-cultural buffet style dining with extensive collection of beverages. There is some stimulating live entertainment by vocalists, instrumentalists, charming belly dancers and magicians on a grand stage, There is even a designated children’s play-hold with movie screenings and playstations.

With this and much more, Big Daddy is redefining the rules of offshore gaming positioning itself as a convention, entertainment, sports and family destination, with a view ro establish Goa into a global offshore gaming and entertainment destination.

A family-friendly destination, Big Daddy has something for everyone.

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PRODUCT LINE

MAGICAL DINING EXPERIENCE WITH ROYAL LAPIZ

Arttdinox, a subsidiary of JSL Lifestyle known for its distinctive design for creating exuberant spaces has come up with a new dining collection that spells glitz glamour & royalty.

Inspired by opulence of our traditional heritage, this collection presents its touch of glamour through the usage of the Blue Lapiz Stone in a crafted

www.arttdinox.com

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stainless dinner set. The semi-precious stones deliberate attempt to impart royalty to every dining scheme, redefining it with an opulent touch.

The mĂŠlange of noble affluence and dignity has been in-genuinely mirrored in the format of the cuts and embellishments.

PRODUCT LINE

EASY TO INSTALL ELEGANT FLUSHING SYSTEMS Villeroy & Bosch has come up with ViConnect Series of intuitive, simple and quick to assemble ‘made in Germany’ installation systems and high-quality flush plates. To make ViConnect even easier for installers to assemble and adjust, some intelligent new features have now been integrated in the installation systems.New toolfree adjustment of the flush flow, new rotatable self-locking feet and a 4-point adjustment of the outlet bend allow even more flexible installation.

These features are being incorporated in the existing range and will now be included successively in all new deliveries.

The current ViConnect range includes dry-wall and brick-wall construction elements for all wall-mounted sanitary ceramics as well as stylish flush plates.

All ViConnect installation systems provide greater flexibility, with heightadjustable feet and durable frames made from powder-coated steel for the secure installation of washbasins, toilets, bidets and urinals.

The flush plates impress with an elegant, contemporary design, highquality materials and atmospheric light functions. An innovative cable technology with bayonet joint ensures quick and easy installation of all Villeroy & Boch flush plates. A dual-flush for the flush plates means that ViConnect actively helps to save water. The flush volume is set by default to 3/6 litres per flush with the option of being reduced to an economical 3/4.5 litres.

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PRODUCT LINE

NATURE INSPIRED BEAUTIES

NITCO, known for its quality tiles, crafted to perfection with the best of design, has come up with an all-new collection of nature inspired Italian glazed porcelain tiles which are a fine blend of design & technology.

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PRODUCT LINE

NITCO has introduced The Aeon, Earth & Nordic range of robust, sleek & minimalistic tiles to beautify your floor and wall spaces.

The all new tile series are strong, beautiful pieces of glazed porcelain stoneware created by expert craftsmen of Italy who have wisely infused design and technology to make stylised creations.

The Aeon range of marble-finish tiles are designed to instantly give a timeless charm to your spaces.

Earth is a contemporary selection of tiles made in Italy that feature earthy tones and minimalist designs- perfect for adding style to your room.

The Nordic tiles are the stone clones for tiles made in Italy. It is a sumptuous convergence of technology and nature, created to subtly add value to every surface.

Taking inspiration from fine Italian architecture, every tile from this collection has a unique variation in tonality and design inspired from the various components of the earth like marble, clay, steel, fossil, coal etc.

Each of the Tile series are created using state of the art technology & world class design to instantly add a timeless charm to your spaces. What’s more; these are Italian tiles at Indian prices!�

Mr. Vivek Talwar

Managing Director, NITCO Ltd.

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PRODUCT LINE

CATCHY CARPET TILES

Welspun Floorings new range of carpet tiles are an apt flooring solution to artistically design a contemporary space.

Crafted with passion and having immaculate designs, Welspun Carpet Tiles are easy to customize and even easier to manage. Available in a variety of hues and graphics, these come in the form of modular nylon tiles that are easy to install. With flexibility to mix and match different designs, colours and textures; carpet tiles are perfect to create an artistic expression that is unique in its kind.

an apt flooring solution to design a contemporary space, be it home or office. These are very effective in reducing noise as they cushion the impact of drop and fall. They are also perfect for underfoot comfort. Fade and stain resistant, Welspun Carpet Tiles come in two sizes, 50cmx50cm and 25cm X 100 cm.

To know more visit www.welspunflooring.in

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