Real Estate Newsletter - January 2 to 6, 2017

India Infoline News Service | Mumbai | January 06, 2017 17:23 IST

This week, Hudco filed papers with Sebi for an IPO, while the Real Estate sector hailed the rate cut and affordable housing incentives. IIFL presents a weekly snapshot of all the major happenings in the Real Estate industry.

Top News

Hudco files papers with Sebi for IPO
Hudco (Housing and Urban Development Corporation) has filed draft papers with Sebi to raise funds through an initial share sale as part of the government’s disinvestment drive, as per media report. The initial public offer will see sale of 200,190,000 equity shares equivalent to 10% stake by the central government through an offer for sale (OFS) route, as per the Draft Red Herring Prospectus (DRHP)The government holds 100% stake in the company. Read More

Real Estate sector hails rate cut and affordable housing incentives
As the final day of the previous calendar year arrived, entire nation was waiting for the late evening when our Honourable Prime Minister Narendra Modi was to address the nation. Since his address on 8th of November last year, when demonetisation of large currency was announced, everyone was under the impression of what new policy might get implemented on the New Year Eve of 2016. During the address, Prime Minister this time announced some New Year gifts for the public that received a cherry on the top when several leading banks in the country slashed its lending rates by almost 0.9% or 90 basis points. Both the news now carry heavy weightage for the realty sector of our country which has high hopes from 2017. “Moving into 2017, it will be the year of affordable housing segment and now especially with the government announcing incentives for this segment’s prospective buyers and banks reducing lending rates, we will now witness more launches of affordable housing projects than any other segment in the realty sector of India,” believes Pradeep Aggarwal, Chairman, Signature Global. Read More

MEP gets NHAI nod to collect toll on the NH24 in UP
MEP Infrastructure Developers Limited has received Letter of Approval (LoA) from National Highways Authority of India (NHAI) for the collection of user fee for ‘BRIJGHAT FEE PLAZA’ at 88.5 for the section from 58 km to 93 km (Hapur-Garhmuketeshwar Section) of National Highway No. 24 in the state of Uttar Pradesh. The period of contract is one year. The contractual amount for the said project is Rs 60.03 crore, payable to NHAI on a weekly basis over a period of one year. The operations will commence within two days after complying with the statutory formalities like submission of performance security and signing of contract as per the LoA. Read More

In-focus

Pune Real Estate: The year that was, and the year ahead
2016 did not bring as much cheer to Pune's real estate market as previous years had. Nevertheless, Pune outperformed Mumbai by between 20-25% in terms of overall sales. The highest-selling category in Pune was mid-range properties priced between Rs 35-50 lakh within the city's municipal limits and its nearby periphery, followed by lower budget housing on the outskirts priced between Rs 15-30 lakh. The latter pricing category offered on the market saw some response; however, whether it sustainable is debatable.
The questions which bothered most buyers in 2016 were: Read More

Domestic News

What GoI's new housing schemes mean for Housing Loan companies

PM Narendra Modi’s new year speech seems to have brought cheer among the Housing Finance companies, as it is widely expected that a demand revival will be seen in the housing sector, as the interest rates are expected to come down sharply. Indeed several of the banks have already started to announce the reduction in lending rates viz., SBI and Punjab National Bank, and rest of the lot is expected to follow suite. Read More

Rate cut is a positive step in line with govt’s desire to revive the Indian economy: Sobha Limit
Responding to the steep and unprecedented interest rate cuts by nationalized banks led by SBI, JC Sharma, VC & MD of Sobha Limited said, “This reduction of lending rates by the banks is the outcome of huge inflow of deposits made possible due to demonetisation. This is a positive step in line with the government’s desire to revive the Indian economy.” He further commented that the steep cuts announced in the home loans upto 90 basis points will be a shot in the arm of the homebuyers as their borrowing costs will come down significantly and their affordability factor improves simultaneously. It is expected that demand for homes will get significant boost with this welcome step. Read More

Sobha Hartland Dubai launches full-fledged operations in key Indian cities
Sobha Hartland, the resort-style luxury housing project of Sobha Group, Dubai encompassing 8 million square feet of freehold community land, has now announced the launch of their direct operations with the opening of three sales offices here in India. Sobha Hartland Dubai is a $ 4 bn project is a mixed use development project on the iconic Dubai Water Canal and boasts of a limited collection of ultra-contemporary villas, townhouses, modern mid and high-rise apartments. This range of luxury products caters to both individuals and families alike looking for their ideal homes in Dubai. Read More

NAREDCO greets the announcements by PM to boost affordable housing
"NAREDCO welcomes the Government’s move to create two additional categories under Pradhan Mantri Awaas Yojana (PMAY-Urban) for interest subvention. Under this, home loans up to Rs. 9 Lacs taken in 2017, will receive interest subvention of 4 per cent and home loans up to Rs 12 Lacs taken in 2017 will receive interest subvention of 3 percent. This will be over and above the 6.5 percent interest subvention on home loans upto Rs. 6 Lacs already available in PMAY. Increase by 33 percent in construction of houses under the Pradhan Mantri Awas Yojana for the economically section is also welcomed. Announcement of another new scheme for neo middle class in rural areas which provides an interest subvention of 3 percent on loans up to Rs. 2 Lac taken in 2017, for construction of new houses, or extension of old houses is also welcomed. Read More

Godrej Properties undeterred by demonetisation sees a spectacular response to new launch, Godrej Greens
Well, while it was largely believed that demonetisation would have a negative impact on the real estate sector, which is generally more inclined towards cash transactions, there is a new story unfolding currently. Godrej Properties has informed the bourses that Godrej Greens, the project which it immediately launched after demonetisation has received an overwhelming response. The company within the two-months of its launch has sold close to 300 apartments, which represents more than 75% of its sale. Read More

NBCC to ring in Diwali again: To consider bonus issue soon
NBCC will soon consider a bonus issue. The company currently has order book worth Rs 80000 crore. According to certain sections of media, the margins are expected to increase. In the last one year, the stock has given a return of 30%. Currently the stock is trading with the P/E of 48.46. NBCC has outperformed the S&P Mid-cap and the BSE Realty index in the last one year. In the last three years the stock has given a return of 99 per cent, which means it has become a multibagger in a short period of time. Read More

IRB's toll revenue increases by 3% in December
IRB Infrastructure Developers Limited has informed the Exchange regarding an update - Average Gross Daily Toll revenue (October 2016 (before demonetisation) v/s. December 2016 post demonetisation). National Highway Authority of India (NHAI) had announced stoppage of toll collection at all toll roads in India from November 9, 2016 to December 02, 2016. The road construction company in India, IRB Infrastructure Developers Ltd., have given the details of its average gross toll revenue, pertaining to its operational projects for the month of December 2016, as compared to October 2016. Read More
 
Keep an eye on developer branding to pick residential projects
The year 2016 has been an interesting one in more ways than one for real estate markets. A number of initiatives like the passage of the Real Estate Regulatory Bill in March 2016; amendments to REIT guidelines in Budget 2016-17, which exempted levy of dividends distribution tax paid by SPVs to a REIT; notification of the Benami transactions bill in August 2016; announcement of the third list of Smart Cities in September 2016 were just some of them. Read More
 
Real sector sector looks up to government for big funds ahead of Union Budget
The introduction of the Real Estate Regulatory Act as well as demonetisation last year have been extremely disruptive for the real estate sector, said Rohit Gera, Managing Director, Gera Developments and VP, CREDAI – Pune MetroAhead of the Union Budget 2016-17, he said that the government has already expressed its vision of housing for all by 2022. And if this is to become a reality, they will need to provide tremendous amount of stimulus for the real estate sector so that homes become more affordable and get produced much faster to meet the objectives. Read More

Real estate sector players want clarity on beneficiaries under Pradhan Mantri Awas Yojana
From providing clarity on beneficiaries under Pradhan Mantri Awas Yojana to giving income tax incentives for first-time home buyer, players in the real estate sector expect the Union Budget 2016-17 to provide higher tax saving on housing loan and house insurance premiums and want clarity on GST, said Anuj Puri, Chairman and Country Head, JLL India.  Read More
 

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