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Real Estate Newsletter - February 02 to 06, 2015

In the previous nine-month Budget, the new government outlined its vision for boosting affordable housing.

February 06, 2015 12:56 IST | India Infoline News Service
Top News
 
India Real Estate Expectations from Budget 2015-16: JLL
Provide On-Ground Impetus for Affordable Housing
In the previous nine-month Budget, the new government outlined its vision for boosting affordable housing. From the upcoming 12-month budget, the Indian real estate sector looks forward to provisions that firm this vision up on the ground. 
 
Provide Tax Incentives to Boost Rental Housing Segment
The Union Budget needs to provide tax incentives for renting out of residential properties. Currently, rental income is treated as normal taxable income. Providing tax breaks specific to rental income will give a significant boost to rental housing segment in the country, and help increase rental supply in the metros.
 
Enable faster project approvals
Developers have been campaigning for a faster project approval process for good reasons. Faster approvals would beef up the supply pipeline, help bring prices down and also ensure that real estate remain viable as a business. The Budget should provide suitable relief on this front, while simultaneously ensuring that construction quality norms are not compromised in the process and that faster approvals do not result in support infrastructure failure in new precincts being developed.
 
Implement Real Estate Regulatory Bill (RERA)
The approval of the pending Real Estate Regulatory Bill was deferred once again only recently. It must now be implemented so that the Indian real estate market becomes attractive for foreign investors. The upcoming Union Budget should make this vitally required policy a reality and put an end to the suspense.
 
The author is Anuj Puri, Chairman & Country Head, JLL India
 
REITs: SEBI seeks to relax tax rules
The Securities and Exchange Board of India (SEBI) has written to the government to seek more tax rules for the Real Estate Investment Trusts (REITs), according to a media report.
 
The SEBI has proposed to abolish capital gains tax and minimum alternate tax (MAT) for sponsors of REITs, the report added.
 
The SEBI said that because of the tough tax conditions, many realty companies have put their plans on hold to raise funds, the report further said.
 
REITs refer to a security that are listed on stock exchanges and invest in income-producing real estate assets, the earnings of which are mostly distributed to shareholders.
 
REITs will provide a new source of funds to debt-laden Indian developers to construct malls and office buildings.
 
Domestic News
 
Will Higher charge on extra FSI hit redevelopment projects?
According to reports, Maharashtra government's proposal to charge builders more for extra 0.33 floor space index (FSI) for housing projects may hit redevelopment work in Mumbai's suburbs.
 
The state government may considering linking the premium to be paid by developers for the 0.33 extra FSI.
 
The state has increased the ready reckoner rates by an average 15% every year since 2008.
 
Maharashtra govt plans to revamp Mumbai chawls: Reports
Maharashtra government is planning to start revamp project on over 93 acres of prime land in the metropolis within next six months, according to reports.
 
Report said that a review meeting with officials of MHADA and the state's Revenue and Urban Development  departments will be held in the first week of February.
 
"Residents have long been complaining that they are forced to live in dilapidated cramped rooms with no sanitation facilities. It is high time we do something for these residents," Minister of State for Housing Ravindra Waikar reported.
 
Omaxe Q3 PAT at Rs13.92 cr
 
Omaxe Ltd has posted results for the third quarter ended 31st December, 2014.
 
The net profit for the quarter stood at Rs13.92 crore.
 
Omaxe Q3 net sales at  Rs303 crore.
Commenting on the Q3 FY15 results, Rohtas Goel, CMD, Omaxe Limited said“The consolidated income from operations for the quarter stood at ` 308 crore as against Rs342 crore in the corresponding quarter of last year.
 
Fresh bookings have slowed with 1.18 mn sq. ft. of booking during the quarter ended December 31st, 2014. Sales have not been on expected lines primarily due to a dull festive season on account of challenging economic scenario. Despite the formation of a stable Government and various reforms announced, demand remained subdued. The New Chandigarh market and the Lucknow market, however, performed extremely well and have been receptive to our product offerings. Delivery and construction in Greater Noida, Faridabad, Lucknow, Bahadurgarh amongst others remain our priority."
 
KOLTE-PATIL collaborates with Snapdeal for their Home Buying Expo, NestFest 2015
With the intention of extending the reach to all the prospective Home buyers in India, Kolte Patil developers Ltd, Pune’s largest developer with presence in Pune, Bangalore, Mumbai and Goa, has collaborated with Snapdeal – India’s largest online marketplace by extending the online booking facility of Kolte-Patil properties, to Snapdeal users. All the 13, Kolte-Patil Pune properties on display at Nest Fest would be available for online bookings on Snapdeal. Now customers can log in to Snapdeal, book a Kolte Patil property and avail all the NestFest offers.
 
Kolte-Patil has been in the news recently for the announcement of their Home Buying Expo, NestFest 2015.  The entire portfolio of Kolte-Patil properties will be up on showcase, on the 6th, 7th and 8th Feb 2015, at SSPMS Grounds Pune. Boasting of a wide product range, the properties ranging from INR 30 Lakhs to INR 10 Crore will ensure that people with various budgets, who aspire to buy a home in Pune, will be a part of this mega event. Many global brands like Samsung, Bugatti, Villeroy & Boch etc., have joined hands with KOLTE-PATIL to deliver value to its customers.
 
Lodha Splendora reopens bookings With Over 400 units sold in 15 Days
Lodha Group has received 400 units of bookings within 15 days for its Ghodbunder Road development in Thane. Connectivity, infrastructure and affordability are some of the key factors that have influenced home buyers to choose Ghodbunder Road in Thane as their favoured residential destination. From affordable apartments to premium properties, the area offers a wide assortment of housing options with exceptional amenities for all. The Thane market sells approximately 350-400 units per month across various developments – however, Lodha Splendora has itself received bookings for over 400 units within 15 days since being opened up for sale. This phenomenal response reflects the growing sentiment of smart home buyers seeking luxurious, well-balanced living options in the Thane region.
 
Over the last decade, Thane has grown into a self-sustaining metropolis and Ghodbunder Road has become an upmarket residential destination to be reckoned with. Infrastructure in the area has seen a major overhaul with expansive flyovers and wide roads as compared to its suburban counterparts. Ghodbunder Road enjoys excellent connectivity – approximately 20 km long, it links the two main arterial roads of Mumbai: the Eastern Express Highway which starts at Sion ending at Thane, and the Western Express Highway, which starts at Bandra (East) and becomes the National Highway leading to Gujarat. Further infrastructure initiatives like the planned monorail network which will connect Thane to the Western suburbs in its next phase, and a Metro corridor extending from Wadala to Kasarvadavali on Ghodbunder Road, are a major draw for this location.
 
Mahindra Lifespace Q3 PAT at Rs42 crores
Mahindra Lifespace Developers Limited (MLDL), the real estate and infrastructure development arm of the Mahindra Group, announced its audited financial results for the quarter ended 31st December 2014.
 
Consolidated Financial Performance
  • The Consolidated Total Income for Q3FY15 is at Rs. 250 crores compared to Rs. 156 crores in Q3FY14
  • The Consolidated PAT, before minority interest, is at Rs. 42 crores in Q3FY15 compared to Rs. 30 crores in Q3FY14
  • The Consolidated Total Income for 9MFY15 is at Rs. 879 crores compared to Rs. 547 crores in 9MFY14
  • The Consolidated PAT, before minority interest, is at Rs. 250 crores in 9MFY15 compared to Rs. 79 crores in 9MFY14
Commenting on the performance, Anita Arjundas, Managing Director & CEO, Mahindra Lifespace Developers Ltd., said, “It’s been a noteworthy quarter for our residential business as we achieved good growth through brand building initiatives and focus on improving sales velocity coupled with emphasis on timely project execution. Mahindra World City Jaipur added 5 new customers this quarter. Lowering of interest rates have sent out positive market signals and we continue to be optimistic about the long term prospects for all our business segments.” 
 
Jayantt Manmadkar, Chief Financial Officer, Mahindra Lifespace Developers Ltd. said, “The quarter saw all round operational performance with revenue recognition across multiple project phases, achieving completion milestones and good sales. Price realisation in both residential and Mahindra World City businesses has also seen year on year increase.”
 
Office space absorption up 28% at 32.5 mn sq ft in 2014
The top eight cities of India recorded overall net office space absorption of 32.5 msf in 2014 according to Cushman & Wakefield, global real estate consultants. The overall net absorption increased 28% year-on-year (y-o-y).
 
Ahmedabad witnessed the highest increase of 163% in net absorption albeit on a low base. Kolkata saw a decline of 33% in overall net absorption from the previous year while Mumbai and Pune recorded a marginal 6% and 4% decline respectively. Bengaluru outpacing other cities by registering 8.9 msf net absorption during the year, a growth of 87% y-o-y. Delhi-NCR recorded 6.2 msf net absorption followed by Mumbai (4.5 msf) and Hyderabad (4.4 msf). Majority of the absorption in Hyderabad during this year was driven by pre-commitments from previous years.
 
Supply increased by 9% y-o-y, to a total of 36.6 msf supply in 2014. Out of this, 92% (33.6 msf) was contributed by Grade A developments. Bengaluru recorded the highest supply addition of 9.4 msf, registering a 67% increase in yearly supply. It was followed by Delhi-NCR (8.7 mf) and Mumbai (5.9 msf).
 
DB Realty gets Maharashtra CRZ clearance for Mumbai Projects
 
SILA acquires controlling stake in Envocare Pest Control Services
 
We are confident that the central bank would look at rate reduction in the coming weeks: Neumec Group
 
Beyond Squarefeet bags Best Retail Real Estate Consultant of the Year Award
 
International News
 
Moody's: Securitizations can help address India's long-term funding needs
Moody's Investors Service says that India's securitization market can provide funds needed to finance housing, infrastructure and urbanization projects as the country's economy grows. Since coming to power last year, the new Indian government of Prime Minister Narendra Modi has set a goal of lifting economic growth, including through polices to stimulate the construction of housing, infrastructure and other urbanization initiatives.
 
"While the government has injected its own capital to support various reform initiatives, securitization could play a significant role by providing funds to finance development projects," says Georgina Lee, a Moody's Assistant Vice President. "Securitization can provide funds for real estate developers, project sponsors and retail loan providers, alleviating pressure on public finances and the banking system," adds Lee.

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