The elimination of indexation benefits in real estate will discourage secondary market sellers

Posted on July 25, 2024 by supriya

The real estate industry warned that eliminating indexation benefits for long-term capital gains would stunt its expansion, negatively affecting property owners and potentially increasing taxes. While experts thought low returns could still be a problem, authorities disagreed, citing high real estate returns. Leaders in the industry felt that the lower long-term capital gains tax rates would help new investors.

The government’s proposal to eliminate indexation benefits for long-term capital gains in real estate has raised concerns among the real estate industry about how it stunts the industry’s expansion.

Property owners who have held their assets for more than ten years will likely be greatly impacted by removing the indexation benefit for long-term capital gains in real estate. Heritage homeowners might pay more in taxes when they sell because they cannot adjust the cost basis of their properties for inflation. After all, indexation is not in place. “The change may result in higher taxes for individuals who wish to sell assets held for more than ten years,” says Niranjan Hiranandani, Chairman of NAREDCO

A flat 12.5% tax on capital appreciation on the sale of a property, with no indexation benefits, has been proposed in the budget for 2024-2025.

The income tax department, however, disagrees with Hiranandani’s viewpoints. The Income Tax Department refuted the claim that people will pay higher taxes on profits from house sales on social media on Wednesday. The department based this on the idea that nominal real estate returns are typically between 12 and 16 percent annually, significantly higher than the inflation rate, 4 to 5 percent.

Real estate leaders concur that the new regime might be more effective when there is greater capital appreciation due to growth factors, a bullish economy, and a simplified tax structure.

However, real estate experts have clarified that the Income Tax department’s clarification that real estate returns are typically higher than the inflation rate is also not true in absolute terms.

Eliminating the indexation benefit for real estate sales will discourage sellers in the secondary market because of higher taxable capital gains, even if there is a lower LTCG (Long Term Capital Gains Tax) tax rate. However, it will not have an impact on first-time homebuyers. According to Ritesh Mehta, Senior Director/Head, North, East & West, Residential Service, India JLL, “the consistent growth of Reddy Reckoner rates across cities ensures no increase in unaccounted money in real estate transactions.”

New investors who hold properties longer than two years will still benefit from the lower long-term capital gains tax, which could make short-term investments more attractive.

The income tax department also stated that simpler tax computation, filing, and record-keeping compliance are advantages of streamlining any tax structure. The new proposal also eliminates the various rates for many asset classes.

Mumbai Rains: During the monsoon, the walk-in homebuyer’s activity slows down, impacting housing transactions

Posted on July 25, 2024 by supriya

The real estate industry in Mumbai has suffered the most as a result of the heavy rains and the numerous cases of waterlogging that have been reported. Real estate experts claim that between July and August, during the monsoon, walk-ins are significantly lower, and real estate transactions are relatively lower. The Ganesh festival heralds the beginning of the holiday season, causing a surge in the Mumbai real estate market.

“Compared to other quarters of the year, housing sales typically decline during the monsoon season (July-September). This has less to do with a real decline in demand and more to do with potential homeowners’ incapacity to visit possible properties during rainy seasons, which significantly impair Mumbai’s mobility” said Rajkumar Singh, Head of Residential Services (West), ANAROCK Group, a real estate consulting firm.

Additionally, many people wait to buy a house until the holiday season, which falls between October and December and is thought to be the most auspicious time to do so. Considering past data trends, Singh said the fourth monsoon quarter (July-Sept) 2019 has the lowest sales of the four.

Statistics show that in the main market of the Mumbai Metropolitan Region (MMR), sales reached 17,180 units in Q3 of 2019 compared to 24,000 units in Q1 of 2019, roughly 21,630 units in Q2, and more than 18,320 in Q4.

Comparatively, in MMR in Q1 of 2022, 29,130 homes were sold during the post-COVID-19 pandemic period; in Q2, 25,785 homes, 26,400 homes, and in Q4, 28,148 homes.

A real estate consulting company called Knight Frank India shared data regarding property registrations, showing 31,836 property registrations in Mumbai in the first quarter of 2023, 30,656 in Q2, 31,817 in Q3, and 32,598 in Q4.

Due to pent-up demand and an uptick in the Mumbai real estate market’s real estate cycle, the trend of fewer transactions during the monsoon season did not continue after COVID-19.

Though fewer transactions were closing during the monsoon season, which runs from July to August, real estate brokers did notice this.

Mumbai real estate values are impacted by flooding

Real estate advisors claim that waterlogging affects Mumbai real estate project costs. Waterlogging can cause major disruptions to daily life, which impacts the city’s real estate market and rental income.

When buying or renting an apartment in an area prone to flooding or waterlogging, experts say that property rates in the micro market can be as much as 10%-20% less.

“A buyer will work hard to negotiate a 5% to 20% discount on the property price if he or she is buying or renting an apartment in an area prone to waterlogging,” a property consultant from Mumbai’s suburbs who wished to remain anonymous said.

Waterlogging is a recurring problem that affects property prices in several areas, such as Gandhi Market in Sion, Hindmata near Dadar, Nana Chowk in Grant Road, Milan Subway in Vile Parle, and Dahisar subway.

IMD issued a yellow alert due to rain in Mumbai.

There will be heavy rainfall in Mumbai through July 24th, according to the India Metrological Department’s (IMD) yellow alert. Mumbai has experienced over 1,000 mm of rain in the last two weeks.

Govt should prioritize housing to boost the real estate market, according to developers

Posted on July 25, 2024 by supriya

This year’s budget, which sets up the housing sector, will not only help the one crore urban poor and middle-class families who lack a place to reside. It will also boost the real estate market and open new doors for developers and homebuyers.

The real estate industry received a major boost from the Union Budget 2024, it was unveiled by Finance Minister Nirmala Sitharaman on Tuesday and highlighted urban development as a cornerstone of “Viksit Bharat.” Under the PM Awas Yojana-Urban, a pledge to invest Rs 10 lakh crore to meet the housing needs of one crore urban poor and middle-class families could change the game.

Along with Rs 2.2 lakh crore in central assistance over the following five years, this allocation shows how seriously the government is taking the urban housing crisis and promoting economic growth. Establishing industrial parks with a Plug & Play model near 100 cities and focusing on rental housing for industrial workers in PPP mode with VGF support enable more infrastructure improvements and affordable housing options. These programs will benefit related industries by creating millions of jobs and reviving the construction industry. Furthermore, developers and purchasers will gain from the emphasis on urban development and open rental markets, which will promote a more robust and inclusive real estate market, according to Avneesh Sood, Director, of Eros Group.

This year’s budget, which emphasizes the housing sector, will not only help the one crore urban poor and middle-class families who lack a place to live but will also boost the real estate market and open up new doors for developers and homebuyers.

Incorporating an interest subsidy in loans for affordable housing is particularly beneficial since it will make ownership accessible to more people. Furthermore, the PPP mode purposefully opted for rental housing, especially dorm-style accommodations. It will create a more diverse housing market by providing industrial workers with much-needed housing options. “The initiative will also encourage the private sector to invest in rental housing projects, further expanding the housing supply,” says Shiwang Suraj, Director & Founder of InfraMantra.

There is currently an excess of available properties compared to the demand from buyers, resulting in an inventory bubble in the real estate market.

According to Solomon & Co. partner Haroon Asrar, “the government’s proposal to the States, for further reducing the stamp duty for women property purchasers, represents a welcome intervention in this regard.”

An important step forward in India’s response to its urban housing crisis is the Pradhan Mantri Awas Yojna (PMAY) Urban 2.0 scheme, which seeks to bring Rs 10 lakh crore investment to urban housing. The central government’s pledge to house one crore families demonstrates its steadfast dedication to promoting inclusive urban development.

“An effective and open rental housing market will be established by the government’s proposal to implement enabling policies and regulations. Residential rental markets in urban areas will consequently become more streamlined and effective. Furthermore, digital land record digitization in urban areas will integrate GIS mapping technology. An IT-based system will also be established to manage taxes and property records. Asrar said, “This initiative would make it easier for the average man to obtain land-related paperwork, which is a positive step toward the effective management of land records.”

Five things the real estate industry anticipates from the finance minister’s budget in 2024

Posted on July 24, 2024 by supriya

Finance Minister Nirmala Sitharaman is scheduled to present Budget 2024 today, and the real estate industry anticipates that the government will prioritize affordable and middle-class housing in the plan. To increase affordability, it has advocated for an enlargement of the definition of affordable housing, tax breaks for homeowners, and financial incentives for builders to build more affordable housing.

More tax breaks are urgently needed for buyers and developers looking to build affordable and middle-class housing projects. Real estate experts believe that the government should increase the annual deduction limit for interest paid on home loans from the current Rs 2 lakh to Rs 5 lakh, as this will boost the demand for housing.

Raise the interest payment deduction cap

To stimulate housing demand in the face of rising housing prices and mortgage rates, the National Real Estate Development Council (Naredco), a body that represents builders, has recommended that the tax exemption on interest on loans for self-occupied property be raised to Rs 5 lakhs in the upcoming budget from Rs 2 lakhs currently.

Developers have also sought tax breaks to increase the supply and demand for affordable homes. According to NAREDCO, the maximum deduction for interest on loans for self-occupied property is Rs 2 lakh, as stipulated in Section 24 of the Income Tax Act.

Permit builders to pay GST at a discounted rate instead of an input tax credit.

NAREDCO has also urged the government to allow builders to pay GST at a concessional rate without an input tax credit (ITC) or a higher tax rate claiming an ITC. The GST rate is 1% without ITC for affordable housing units and 5% without ITC for other residential units. Developers would save money on taxes and have improved cash flows if they could select between higher rates ITC and concessional rates without it, resulting in advantages for end users.

In its wish list for Budget 2024, the Confederation of Real Estate Developers Associations of India (CREDAI), a body that represents real estate developers, suggests that the government consider granting unlimited interest deductions for self-occupied property or raising the deduction limit to Rs 5 lacks for homebuyers.

Encouragements for reasonably priced housing

The present growth trajectory is biased in favor of luxury and mid-range housing. Affordable housing is still in short supply, so higher-priced homes can’t sustain this momentum despite the unique housing needs of India’s lower-class populations. According to experts, the government should concentrate on offering more subsidies for mid-range and affordable housing.

According to ANAROCK Research, following COVID-19, the sales share of affordable housing fell sharply, from over 26% in 2022 and over 38% in 2019 to about 20% in Q1 2024. This segment’s share of the total housing supply in the top 7 cities decreased to 18% in Q1 2024 from nearly 40% in 2019 due to low demand. In FY23-24, total sales hit a record high of roughly 4.93 lakh units, despite the launch of 4.47 lakh units.

Anuj Puri, Chairman of ANAROCK Group, states that many interest stimulates previously provided to affordable housing builders and consumers have expired over the past two years. High-impact measures like tax breaks are needed to revive this significant market sector. This will help buyers by bringing down the cost of homes, and developers by motivating them to focus more on building affordable housing.

PMAY Credit-linked Subsidy Scheme

To encourage first-time purchasers of reasonably priced homes throughout cities, the EWS/LIG program, which was set to expire in 2022, ought to be brought back. This will stimulate demand in this market segment once more. CLSS was previously available for housing loans to EWS/LIG buyers in new building projects and for adding rooms, kitchens, toilets, etc. to existing dwellings, subject to criteria specified under government guidelines. According to Puri, if the qualifying requirements are met, all “kaccha” homes being converted into “pucca” ones may also be eligible for this subsidy under PMAY (Rural).

Provide developers of affordable housing a 100% tax holiday once more.

To boost supply and incentivize developers to build more affordable housing, the government may bring back the “100% Tax Holiday” benefit previously provided under section 80-IBA of the Finance Act, 2016. The profits from developing and constructing affordable housing projects were subject to significant tax relief under this section.

Change the definition of affordable to include more homebuyers and expand the benefits of additional deductions.

The Ministry of Housing and Urban Affairs states that a buyer’s income, cost, and size all play a role in determining affordable housing. In large cities, a house or apartment that fulfills the requirements for affordable housing can be valued up to Rs 45 lakh, and in non-metropolitan areas, it can have a carpet area of up to 90 square meters. Loans from banks are given to individuals to help them build houses or buy apartments based on the central bank’s definition.

The government must carefully consider how to modify home prices within the affordable housing budget, considering the unique characteristics of each city’s real estate market. The size of the units is 60 sq.m. The carpet area is appropriate according to the current definition. However, most cities cannot afford the prices of units, which can reach Rs 45 lakh.

For instance, a budget of Rs 45 lakh doesn’t matter in a metropolis like Mumbai. It would have to be raised to Rs 85 lakh minimum. The budget should be increased to Rs 60-65 lakh in other cities. According to Puri, more homes would be eligible for the affordable price tag with such price revisions, allowing more buyers to take advantage of government subsidies and lower GST rates at 1% without ITC.

It is also necessary to revise the definition of an affordable residential apartment, which presently includes requirements for carpet area and a price cap. Only the carpet area condition should be kept, NAREDCO advises, with no upper price limit. A greater percentage of the lower and middle class could purchase homes thanks to this adjustment, which would account for rising land prices in major cities and expand the benefits of affordable housing to more projects.

The criteria for affordable housing are based on the cost of the property (Rs 45 lakh), carpet area (60 to 90 sq.m), and income of the homebuyer (EWS/LIG), according to Anshuman Magazine, chairman and CEO-India, South-East Asia, Middle East & Africa, CBRE. The government should consider extending the cost, size, and income restrictions to, prove the scheme’s inclusivity. Given that capital values in larger metropolises (Mumbai, Delhi-NCR) can be significantly higher than in other cities, the government should think about raising the size criteria for metro cities to 90 sq.m. and establishing three to four brackets of unit sizes and prices to define the eligibility criteria depending on city/state dynamics.

Boost the amount of money allotted to PMAY

Along with the recent announcement from the Cabinet to provide financial support for the construction of an additional three crore rural and urban houses under the scheme, the government should consider increasing the budgetary allocation towards the Pradhan Mantri Awas Yojana (PMAY) compared to the previous year. This shows the government’s continued commitment to supporting the affordable housing sector. The prompt implementation of the scheme possesses considerable potential to stimulate the industry even more.

According to Magazine, “We also eagerly await further details concerning the PMAY-Urban scheme, given the announcement made about the government’s plan to launch an initiative to help deserving sections of the middle class living in rented accommodations, slums, chawls, and unauthorized colonies to buy or build their own houses in the Interim Budget 2024-25.”

Additionally, the government offered a 100% tax deduction for profits and gains from the business of creating and constructing affordable housing projects under Section 80IBA. The tax holiday did, however, end in 2022. According to the magazine, developers of affordable housing projects would gain from the resuscitation of the program because these projects usually have narrow profit margins.

Utilize land lots that the government and public sector businesses have available.

The government or public sector organizations have access to multiple underutilized or inadequately utilized land parcels. These might include Port Trust property, railroads, abandoned military land, etc. When the land and necessary permits are obtained, we advise unlocking these land lots and forming partnerships with reputable private developers to build affordable housing. These land lots might also be for industrial parks and associated infrastructure. This will help the government take advantage of the operational efficiencies of the private sector while also lowering the risk associated with development,” he stated.

Magazine went on, “We also implore the government to provide a comprehensive framework regarding changes in land usage.” to expedite construction and facilitate land acquisition.

CREDAI National Chairman and Gaurs Group CMD Manoj Gaur states, “The real estate industry has set high expectations for the upcoming budget.” First and foremost, the goal of resuming the interest subsidy program is to support the housing industry as a whole. Secondly, we are also seeking a redefinition of affordable housing. The present limit should be increased from 90 sq meters, and Rs 45 lakhs in space and pricing, respectively. These will be a much-needed intervention as a considerable demand exists in the affordable housing segment. Lastly, we look forward to announcements on GST input credit to stimulate growth and foster a more resilient real estate environment.”

Over the past three years, there have been fluctuations in the supply and demand for affordable homes in tier 1 and tier 2 cities, according to Dhruv Agarwala, Group CEO of Housing.com and PropTiger.com.

The forthcoming budget should prioritize reinvigorating the supply and demand for residential properties within the Rs15-75 lakh per unit price range. Potential homebuyers could be effectively encouraged by the introduction of interest subsidy programs” he said.

Agarwala stated that the government could strategically use its vast land banks in collaboration with private developers to increase supply by providing capital and land at discounted prices.

The condition of the property market

Director of County Group Amit Modi said, “One of the most persistent demands the sector emphasizes is the need to grant industry status to enable easier access to low-cost financing, which benefits consumers directly. “Moreover, timely project completion and cost-effectiveness depend on the implementation of single-window clearance.”

Real estate experts said that the sector should also be classified as infrastructure.

By 2030, the real estate industry will likely account for 13-15% of the Indian GDP. As such, stakeholders have long demanded that the sector be granted “infrastructure” status. This could significantly reduce the cost of borrowing for developers and increase the availability of institutional credit, thereby stimulating growth and investment. According to the report, “Standardizing the definition of affordable housing can also enhance uniformity in financing requirements amongst institutions and possibly make it easier for eager homebuyers to obtain credit.”

India’s commercial real estate market: Surpassing the global recession

Posted on July 24, 2024 by supriya

Due to severe downturns in the global economy in 2023, the commercial real estate market saw a 66% annual decline in investments. Significant markets such as the US and Europe saw a 25% decline in leasing activity. The global commercial market is in crisis mode!

The Indian commercial real estate market, on the other hand, attracted $5.4 billion in investments, the most since 2020, the year before the pandemic, demonstrating remarkable growth and resilience. The office sector in India has been particularly vibrant, drawing over $3 billion in investments, a 53% increase from the previous year. The growth in demand from Global Capability Centers (GCCs) and the strong leasing activity of Indian corporations, which now make up 46% of all market leasing activities, are the main drivers of this surge.

India’s office sector is growing primarily due to demand from the GCCs. India’s GCCs are expanding rapidly as international corporations look for cost-effective outsourcing solutions in the face of economic pressure. With a projected 10% compound annual growth rate (CAGR), the GC industry is predicted to rise from its current $465 billion by 2027. With a 30% market share in the GCC overall, India employs up to 2 million professionals.

The GCC model is evolving, with hubs driven by technology and customer experience replacing centers primarily concerned with standardization and cost arbitrage. This pushes these developments to increase the spending per square foot and the space per square foot, which raises the investment in Grade A commercial real estate even more.

There is plenty of room for growth because only 40-45% of Fortune 500 companies currently have GCCs. Our estimates indicate that India will have 3.5.-4 million workers employed in GCC countries over the next three to four years, implying a doubling of the Grade A space needed, given the country’s demographic advantage (we will add 80-90 million people to the working age population by 2027).

The increasing percentage of domestic investors and capital entering this market relative to previous foreign capital inflows is another interesting development. Prequin data reveals a dramatic fall in foreign fund activity in India in light of the geopolitical unrest and state of global interest rates. The Indian real estate market is resilient despite these obstacles, and a growing proportion of ultra-high-net-worth individuals and family offices are among this new class of investors.

Approximately Rs. 3 trillion has already been invested by these investors, who are drawn to the regulated environment of Alternative Investment Funds (AIFs) and the tangible security of asset-backed investments. This has a significant impact on the real estate market. This change highlights a dynamic shift in investment patterns, encouraging the sector’s growth to be driven more domestically.

Tier 2 towns will likely emerge as new centers of development and investment in commercial real estate. The Fortune 500 companies’ headquarters are dispersed across 51 cities in the US, whereas in India, the major corporations are centered in just 5-6 cities. Although the infrastructure for transportation has advanced significantly, these cities urgently require an upgrade to their urban infrastructure to improve their quality of life and draw in more businesses and workers.

As investment flows increase twofold to tier 2 cities, pioneering firms are shifting their focus to undeveloped land parcels in these cities. For local and regional developers, this trend underscores the importance of enhancing their offerings and attracting foreign investors.

Through this realignment, not only will Tier 1 cities be addressed, but diversified and sustainable, urban development will be enabled across the nation. As we move forward, these changes are expected to play a crucial role in shaping the real estate investment landscape over the coming years, heralding a new era of growth beyond the traditional hubs.

Tenant news to rejoice about! The April-June quarter saw an average price correction of 5-10% in Bengaluru’s rental housing market

Posted on July 24, 2024 by supriya

Bengaluru’s rental housing market saw an average price correction of 5-10% during the April-June quarter of the current calendar year, according to local brokers who spoke with HT.com. This news should cheer up tenants in the city. The primary reasons for this are the large number of tenants who have relocated to the city’s outskirts, where new housing stock is available at lower rental prices than in desirable neighborhoods, and the growth of co-living options, which provide better value for the money.

The second quarter of the year usually sees an increase in rental activity due to several factors, including families moving before the start of the new school year, a new wave of professionals moving into the city, and so forth.

The price correction is the result of several factors. According to Manoj Agarwal, founder of Agarwal Estates, “many tenants are shifting to the outskirts of the city where rents are lower compared to the prime areas surrounding IT corridors given a more specific hybrid work culture in place.”

He continued, “The average vacancy rate in his portfolio of rental properties throughout the city has increased to 5% from the previous 2-3%.

With a decline in rental rates of more than 10%, the trend was most noticeable in areas bordering the IT corridors, such as Whitefield in East Bengaluru and Sarjapur Road. According to a local brokerage firm, a 1 BHK apartment rented out for Rs28,000 per month in the first quarter of the year is currently rented for Rs 25,000.

However, data from prop-tech company Square Yards revealed that a 750-1,175 square foot, 2BHK that was previously available for between Rs 28,900 and 45,200 per month is now listed for a rental cost between Rs 33,600 and 40,300.

Property consultants saw less evidence of this trend shift in the areas surrounding the central business districts. They added that contrary to standalone Grade B buildings, rents in Grade A projects built by well-known brands have decreased less.

Multiple justifications

Vice president of Hanu Reddy Realty Kiran Kumar noted that the previous modification also addresses Bengaluru’s growing inventory levels as developers counter the city’s real estate demand surge.

In Bengaluru, 12,432 residential units were introduced in the June quarter of 2024, an 8% yearly increase, according to a Knight Frank India report. 14,271 units were sold then, an 11% increase from the previous year. According to brokers, many purchasers who reserved their homes during the COVID-19 pandemic are now getting their possession.

According to Saurabh Garg, co-founder and chief business officer of proptech unicorn NoBroker, “Bengaluru’s rental market is returning to normalcy this year.”

Other participants noted that the number of co-living options in the city has also reduced the share of the rental housing market. This quarter, Kumar predicts a further 10% decline in rent, especially in the city’s periphery.

Trends in Q2 2024

Bengaluru had the highest rental yield (4.5%) in the first quarter of 2024 out of the top 7 Indian cities, according to a report from a real estate consulting firm.

A property’s rental yield is the proportion of its total value that is rented out earned in rental over a year.

Rents have risen by over 40% in some prime areas of the city after the COVID-19 pandemic as workers returned to work and landlords attempted to recover annual price increases lost.

How are the landlords reacting?

It is common to refer to Bengaluru as a landlord’s market. They have recently gained notoriety due to a number of their unusual demands. Nevertheless, they appear to take note of the changing tide.

“In Bengaluru, landlords are starting to recognize that tenants do not want to pay exorbitant rent.

A local broker said, “Instead of keeping the property empty for months while searching for the perfect tenant, we suggest they reduce the rent slightly.”

In a recent instance, a landlord in East Bengaluru’s Indiranagar locality, who had originally hoped to receive Rs1.20 lakh/ month for his 4 BHK apartment, revised the rental amount to Rs 1 lakh, the person cited.

Do rents still stay the same?

While local brokers reported a drop in overall rentals and rising for properties on the outskirts, some stakeholders insisted that prices have stayed steady.

According to data from Square Yards, and the integrated prop-tech platform, a 950-1,200 square feet 2BHK in Electronic City is currently available for Rs 32,600-41,400 per month during the first quarter of 2024. The original price was Rs 32,500 – 40,800. In the meantime, the monthly rental cost of a one-bedroom apartment that was previously available for Rs 21,000 -22,100 is now Rs 21,900– 23,000.

Bengaluru is the top option for Indian non-residents looking to buy mid-range and affordable homes

Posted on July 24, 2024 by supriya

Data gathered from several consulting firms by HT Digital indicated that Bengaluru has maintained its position as the top option for non-resident Indians wishing to invest in India’s residential real estate market, particularly those seeking affordable and mid-segment homes.

The main draws for this group of homebuyers are the city’s pleasant weather, rising property values, cosmopolitan culture, high rental yields, and a bustling commercial district.

Though most non-resident Indians are drawn to the region for investment opportunities, the IT capital market is driven by end users regarding sales among domestic homebuyers.

According to Shalin Raina, Managing Director, Residential Services, Cushman & Wakefield, the data about NRI home purchases in Bengaluru shows that 35% of the transactions are for end-use, and 65% of the deals are for investment purposes.

Prooptech unicorn Among its NRI clientele, NoBroker reported a 60:40 split in favor of investing.

Developers and consultants noted that most of these purchases are the second or third additions to the portfolios owned by non-resident Indians.

“Principal Partner and Sales Director of SquareYards.com, Sharad Sharma, added that NRIs are displaying interest in senior living communities and plots, broadening their investment portfolio beyond apartments.”

From and to where exactly?

The US, UAE, and Singapore are the top three regions influencing demand from non-resident Indian buyers for the real estate projects developed by Bengaluru-based developers Concorde and Brigade.

NRI buyers account for 10% of our sales on average. “These sales occur either in India when the NRIs visit India or abroad during our events, or through our international team’s outreach,” says Viswa Prathap Desu, COO of Residential, Brigade Group.

According to Saurabh Garg, co-founder and chief business officer of NoBroker, the NRI clientele prefers to invest in reputable brand projects and high-demand rental areas, typically near IT corridors.

He mentioned that popular areas for NRI investors were Kanakapura Road in the southern part of the city, Thanisandra in the north, and Whitefield and Sarjapur Road in East Bengaluru.

According to NoBroker data, the average price of a property currently ranges between Rs 9,000 and Rs 12,000 per square foot in these areas.

Others mentioned the proximity to the airport, the presence of Grade A developers, and the reasonably priced real estate in Hebbal and Devenahalli as reasons why they are desirable choices for NRIs.

According to the report, more than 55% of purchasers also sign up for property management services at the time of purchase.

What draws in this particular group of clients?

Developers and property consultancies shared that, contrary to popular belief, NRIs purchasing real estate in the IT capital have demonstrated, NRIs purchasing real estate in the IT capital have demonstrated a greater preference for mid-range and affordable homes.

Approximately 69% of the NRI transactions made possible by SquareYards.com involved affordable and mid-range housing, which includes apartments under Rs 1 crore. According to Ravi Shankar Singh, Managing Director, Residential Transaction Services, Colliers India, 70% of the unit level demand for real estate consultancy Colliers has been in the range of Rs 1.5 to 2 crore.

Brigade Group’s Desu claims that the class of NRI workers in the clerical and administrative fields is the main source of demand in the affordable and mid segments. With their savings, these workers purchase a 2BHK or a small 3 BHK apartment, which they can either move into when they return to India or use as a rental.

However, C-suite executives like villas and the mid-segment draw techies who typically choose a 3BHK, according to Kranti Alladi, Head of Sales and Marketing at Concorde.

Two main depressants are poor infrastructure and heavy traffic.

The city’s traffic problems and infrastructural problems have been the biggest deterrents for NRI investors, despite Bengaluru’s strong demand and high rental yields helping the city dominate its choices.

“One of the primary deterrents for NRI property purchases in Bengaluru is traffic congestion, which has been consistently identified as a significant concern,” said Rana.

Others concurred. “Purchasing a home in an establishment is another barrier. However, finding inventory at their preferred location presents a challenge, as noted by Garg of NoBroker.

Across the nation, NRI’s interest in the housing market is growing.

In North India, the tale is the same. Approximately 14% of DLF’s total sales in the fiscal year 2022-2023 came from NRI investors, with the GCC, USA, UK, and Singapore contributing significantly to the company’s sales exceeding Rs 2,000 crore. DLF is based in Gurgaon. It anticipates a 20% increase in this fiscal year.

25% of sales (or about Rs 1,800 crore) for the company’s most recent project, DLF Privana South, came from NRI markets, with the US and Canada, Southeast Asia, and the GCC making major contributions. Aakash Ohri, Joint Managing Director and Chief Business Officer, of DLF Home Developers Ltd., told Hindustan Times Digital from Africa, particularly from Tanzania and Kenya, showed interest in the project.

Which hotel chain has the highest market value in India?

Posted on July 24, 2024 by supriya

The report includes a list of the nation’s wealthiest real estate investors. The figures for wealth and value represent a snapshot of May 31, 2024.

“We are extremely proud and honored to reaffirm our long-standing partnership with Hurun India for the 2024 GROHE-Hurun Indian Real Estate 100,” stated Priya Rastogi, Leader, India and Subcontinent, LWT IMEA. The Indian real estate industry has experienced rapid development, propelled by forward-thinking leaders who constantly push the envelope about creativity and quality. The most current rankings demonstrate the adaptability and tenacity of these industry pioneers and their dedication to promoting a progressive and sustainable future for the sector.

We are committed to helping these leaders in their endeavors and are excited to witness the ongoing development of the Indian real estate market. The seasoned professionals have our gratitude for their innovative ideas and brains.”

“The 2024 GROHE-Hurun India Real Estate 100 confirms our prediction of the breakout of Indian real estate brands post-COVID,” Hurun India’s founder and chief researcher, Anas Rahman Junaid, stated. This year’s list of companies saw an impressive 86% rise in their values, adding INR 6.2 lakh crore. This indicates the sector’s dynamic recovery and robust growth.

Government restrictions and slowing demand hinder China’s real estate market. India is quickly overtaking China to become Asia’s real estate capital, outpacing China’s growth rate, with 36 billion-dollar real estate companies in the 2024 GROHE-Hurun India Real Estate 100. India’s market benefits from a growing middle class, rising urbanization, and a youthful population. Furthermore, the Real Estate (Regulation and Development) Act’s (RERA) implementation has improved accountability and transparency, which has increased investor confidence. In contrast, China’s market struggles with excess supply, high debt levels among property developers, and strict government regulations, making India’s real estate sector a more attractive and stable investment destination.

India is experiencing a booming real estate market! Businesses with expertise in residential, commercial, hospitality, and co-working spaces are included in the 2024 GROHE-Hurun Real Estate list of India’s 100 most valuable real estate enterprises. India’s real estate market is booming, largely due to the country’s robust economic growth, expanding middle class, and rising investment. Residential sales are predicted to increase by 10-12% in FY 2024-2025, with the middle class expected to reach 547 million by 2030. An additional $4 billion in foreign investments annually are driving growth.

Although the report offers insights into the real estate sector, the following are some highlights related to the hospitality sector:

In the 2024 GROHE-Hurun India Real Estate 100, Indian Hotels Company, also known as the Taj Group of Hotels, came in third place with a valuation of INR 79,150 crore, indicating a 43% growth.
The Oberoi Group, headed by Arjun Singh Oberoi, came in at number fourteen with a valuation of 28,430 crore, or a 103% growth.
The most valuable hospitality company is IHCL/Taj Group.
Indian Hotels Company, Gera Developments, Oberoi (Hospitality), BCD, Macrotech Developers, and Skyline are among the 100 companies listed in the 2024 Grohe-Hurun India Real Estate 100 with a global presence.
The most significant participant in Delhi’s real estate market is reportedly the Oberoi Group.
Following residential and commercial real estate, the hospitality industry dominated the market. IHCL, Oberoi, and Lemon Tree were three of the top ten companies in the hospitality industry.
Hotel Leela Venture, under the direction of Vivek Nair, came in fourth place with a 140% YoY growth. Ashish Jakhanwala’s Samhi Hotels came in second with a 129% YoY growth, and Patanjali Govind Keswani’s Lemon Tree came in third with a 111% growth.
IHCL is the second-oldest company, founded in 1899; Oberoi Group, founded in 2010, is the fourth-oldest; and Samhi Hotel, founded in 2010, is the ninth-youngest.
IHCL came in fourth place for debt reduction, falling from 1,388 crore in 2022 to 331 crore in 2023, with an overall debt change of 1,057 crore.
With a debt-to-equity ratio of 0.03x, Hotel Leela Venture, Apeejay Surrendra Park Hotels, and IHCL had the second-lowest ratio.
With 13,359 workers, Oberoi Group is the sixth-largest employer in workforce size, followed by Mahindra Holiday & Resorts India in ninth position with 5,262 workers.
Two hospitality businesses from the 2024 GROHE-Hurun India Real Estate List 100 that went public in 2023 were Juniper Hotels and Samhi Hotels.

How come India’s luxury real estate marketing is rebounding?

Posted on July 24, 2024 by supriya

This edition of Forbes India explores everything from the developers creating those opulent homes to building the architectural and design features in these residencies.

The upward trend of premium real estate and equity prices, albeit not necessarily at the same rate, indicates a healthy economy. Among the more liquid investment options, stocks yield higher returns than other asset classes. This enables investors to partially book their profits and reinvest the excess into real estate.

Investors, especially the higher net-worth ones, would be inclined to take some profits off the table as the Sensex from 70,000 to 80,000 in just 58 trading sessions— the fastest 10,000-point gain in its history. A prudent use of those profits would be in luxury real estate, where many properties are available, from lavish apartments and penthouses in brand-new urban towers to villas and vacation homes outside major cities.

Property has seen a renaissance thanks to the rush of liquidity, especially at the upper end. This edition of Forbes India explores everything from the developers creating those opulent homes to designing the architectural and design features in these residences.

According to The Capgemini Research Institute’s 2024 World Wealth Report, there will be approximately 36 lakh high-net-worth individuals in India in 2023. According to the report, these people had net worths of at least $1 million (Rs 8.3 crore) and had an astounding $1,446 billion in wealth in 2023.

Moving up a notch, there were slightly more than 13,200 ultra HNIs (Indians with a net worth of at least $30 million, or roughly Rs250 crore) in 2023, according to Knight Frank’s 2024 Wealth Report. Due mainly to this extremely wealthy group, DLF, the most valuable developer in India, sold Rs 1,500 crore worth of ultra-luxury apartments in the fiscal year 2024.

Apartments in buildings such as Oberoi Realty’s 360 West in Mumbai can cost up to Rs 45 crores, as Samar Srivastava notes in ‘Homes That Last Generations’, page 44. The fact that buyers include billionaire Radhakrishnan Damani, the founder of DMart, and Bollywood star Shahid Kapoor is not surprising.

India’s financial capital is ranked eighth by Knight Frank’s Wealth Report for its price growth for luxury housing. Discover why by taking a laid-back, if slightly rushed, tour of this still-developing city. Chawls and slums are being replaced by ultramodern skyscrapers featuring multipurpose sports courts and reflexology gardens.

For this reason, Maximum City is an essential feature for any real estate developer worth their nine-hole putting (yes, it is included in the amenities package). The Menons, who are part of the Sobha Group, have become the third-biggest real estate group in Dubai, and are featured on the cover of Forbes India for this edition. The patriarch PNC Menon believes Sobha can make “about Rs 100,000 crore over 10 years” in the US, where the tour will next stop.

Then there is Mumbai, where Menon tells Manu Balachandran, the writer of the cover story, “We have to show something India has not seen.” Mumbai is the only city in India where we can repay the money we can afford to spend. Check out Balachandran’s “Brick by Brick” for additional information on the Mumbai— and the US—gambit.

This opulent real estate special offers a lot more. Mexy Xavier and Pankti Mehta visit the ultra-wealthy homes of India’s elite to seize elements that range from the conventional to the glitzy, which frequently mirror the characters of this fashionable group. Benu Joshi Routh also explores architecture and design revolutionizing the concept of luxury living.

Why do wealthy Indians own the most real estate in London?

Posted on July 9, 2024 by supriya

High and ultra-high-net-worth individuals (HNIs/ UHNIs) from India have long favored London as a foreign real estate investment destination. The clientele has evolved from industrialists and Bollywood celebrities to Indians who want to invest in London’s real estate market for their children who are going to be attending university there.

One of the largest groups of property owners in London is comprised of Indians. According to Akash Puri, Director of International at India Sotheby’s International Realty, “Some are students and families who buy homes while traveling to the UK for education, others are UHIs with vacation homes abroad, and others have lived in the UK for generations.

These days, the cost of real estate in London is similar to that of Mumbai and Delhi at home; a 1BHK unit costs Rs 3.2 crore, while a 3BHK costs Rs 5 crore and more. Rich Indians have a few favorite spots in London, including Oxford Circus on the west side of the city and Mayfair and Marylebone in the city’s center.

Important complete factors

Wealthy Indians are drawn to London as a destination for real estate investments for multiple reasons, according to an expert who spoke with HT Digital. According to them, the city offers possibilities for business growth, steady capital growth, currency diversification, effective taxation, a good standard of living, and residence options through real estate investments.

“Investing in a property on the outskirts of London makes more sense than paying exorbitant rents for an extended period, and we wanted to secure a safer, higher-quality future for our children,” stated a couple who recently made their purchase.

“Real estate prices in the region have continued to grow in the past few years, despite Brexit, which was expected to disrupt London’s prominence as a property market,” stated Vivek Rathi, head of research at property consultancy Knight Frank India. He said that London’s liberal culture and reputation as a center of high-quality education are other advantages.

Indians are also purchasing real estate in London due to the consistent capital growth and rental yield caused by a supply-demand imbalance.

Demand for housing in London is higher than supply, with a typical 35% shortfall. The city remains resilient despite economic challenges because of this disparity. HNIs have invested in London for the past few years due to the city’s favorable property prices and stamp duty holiday for buyers.

There are ultra-rich Indians who view owning prominent properties in desirable cities like Mumbai, New York, and London as a matter of prestige and status.

This is how the figures add up.

A Knight Frank report states that in 2023, the number of ultra-high-net-worth individuals in India increased by 6.1% annually, outpacing the global average growth of 4.2%. A person with a net worth of at least $30 million is considered ultra-high net worth.

“Wealth transfer to foreign destinations is likely to increase as the number of NHIs and UHNIs in India increase, and this should find expression in London’s property market,” Rathi said.

According to the report, residential real estate accounts for about 32% of the wealth of India’s ultra-rich, with 14% of that property situated outside that nation. In 2024, about 12% intend to buy a new house.

According to a survey conducted by the consultancy, when asked which nations or regions have high net worth individuals would most likely invest in real estate, as many as 47% of UHNIs from India stated that they would want to buy a property in the UK, 41% in the UAE, and 29% in the US.

UK-based Indian developers

Due to the various benefits that the UK property market offers, several Indian developers have made an effort to include London in their global portfolio.

As Macrotech Developers, the Mumbai-based Lodha Group entered the London market in 2013. It proceeded with two residential developments in the downtown area, No. 1 Grosvenor Square in 2017 and Lincoln Square in 2016.

A more recent example is the $200 crore investment made by commercial real estate investment platform Property Share into the UK’s warehousing industry. The advantages of the location will allow the company to expand its operations further into the city.

Marquee clientele

Numerous powerful businessmen, such as Neeraj Kanwar, Lakshmi Mittal, Ravi Ruia, Mukesh Ambani, and the Hinduja brothers, are known to own real estate in London.

Adar Poonawalla, the CEO of Serum Institute of India, reportedly paid Rs 1,446 crore for a 25,000 square-foot Mayfair mansion, making it the most expensive house in London in 2023.

However, there are rumors that Mukesh Ambani owns Stoke Park, a 900-year-old hotel outside of London. There are thirteen tennis courts, fourteen acres of private gardens, and a 27-hole golf course on this 49-bedroom estate. According to reports, the billionaire purchased the hotel for 57 million pounds, or Rs 529 crore, in 2020.

Section 106 of the Transfer of Property Act: Important Information for All Property Owners

Posted on July 9, 2024 by supriya

Section 106 of the Transfer of Property Act (TPA) governs lease termination to ensure a good landlord-tenant relationship. By serving a lease termination notice, the section gives owners the legal ability to reclaim possession of the property. Propertywala provides a template notice to vacate the premises and explains the legal responsibilities of owners and tenants under section 106 of the TPA.

Tenancy and ownership obligations are also well-served by the Transfer of Property Act (TPA), which handles property transfers and related issues. The owner has the legal right to specify the conditions of the lease and, if necessary, to issue a notice of vacuity under Section 106 of the TPA. An example will help us better understand it:

Landlord Mr. Rajendra Gupta is the owner of multiple rental properties. He returns to one of his stores one day to launch a new venture. But for the next three years, Mr. Ramesh, who has been operating a salon, has been in charge of the home. Mr. Gupta must now give written notice that he is leaving the property for his use. The process can be carried out easily by adhering to the guidelines provided in TPA Section 106. This article will explain the purpose of TPA Section 106 and what should be included in a formal notice to the tenant.

Section 106 of the Transfer of Property Act:

Section 106 of the Transfer of Property Act of 1882 governs the duration of certain leases in the absence of a contrast. In this section, the lessor or leases of immovable property shall serve a six-month notice period. This section applies to properties that are used for manufacturing and agriculture. To lease real estate for any other purpose, the lessor or lessee must serve a 15-day notice. The notice, which must be in writing and indicate the tenant’s intention to end the lease, must be sent by the day the tenancy is about to expire.

An illustration of a notice under Section 106 of the Transfer of Property Act

When drafting a notice under section 106, owners or legal counsel must include pertinent details. The notice must contain specifics like the date of the notice, the party’s name, a description of the property, the terms of the lease, and the date of termination. Here is an example of a format.

[Owner’s name]

[Owner’s address]

[City, State, PIN code]

[Date]

[Tenant’s name]

[Tenant’s address]

[City, State, PIN code]

Dear [Tenant’s Name],

Subject: Termination of tenancy for [Property address]

This notice informs you that your tenancy at [Property address] will end as of [Termination date]. Kindly leave the property by the specified date.

I appreciate your cooperation.

Sincerely,

[Owner’s name]

[Signature]

Decision of the Supreme Court regarding Section 106 of the Transfer of Property Act

Nand Lal and Jitendra Rai had an oral rental agreement with a public trust headed by Shri Ramanand for two shops. After the tenants stopped paying rent, the trust sent lease termination notices by Section 106 of the Transfer of Property Act. The trust filed an appeal, but the court dismissed it because it was not registered under the Rajasthan Public Trust Act. The court’s initial appeal decision went against the trust, underscoring the significance of the trust’s registration.

Afterward, the Supreme Court granted the appeal against the decision made by the lower court. The suit could proceed because of the trust’s later registration, even though it was initially barred because of its unregistered status. In favor of the trust, justice was done when the case was sent to the Trail Court for a merit-based decision. This case emphasizes registering and utilizing Section 106 of the TPA when terminating a lease.

In conclusion, Section 106 of the TPA of 1882 establishes clear communication regarding lease termination. Safeguarding the interests of the landlord and the tenant and preventing disputes, makes the transaction go more smoothly. To prevent misunderstandings, tenants should receive a written notice that includes all the details of their lease. Property owners must understand the legal authority and provisions outlined in Section 106 of the TPA to manage tenants effectively. The purpose of these laws is to prevent potential problems and encourage a better landlord-tenant relationship.

Prominent areas near Jewar International Airport with room to grow

Posted on July 5, 2024 by supriya

Despite construction delays, one of the innovative projects that has altered the NCR skyline is the Noida International (Jewar) Airport. Once it’s operational, real estate goldmines like Noida, Greater Noida, and Yamuna Expressway will certainly take off. This list of the top communities that Jewar Airport will benefit from can be used by investors hoping to take advantage of this opportunity.

The operational timeline of the Noida International Airport, also known as the Jewar Airport, was recently pushed back, moving from the final quarters of 2024 to April 2025. The demand for real estate in Jewar’s surrounding areas is nevertheless persistently high due to the excitement surrounding this significant development. New residential developments are being dotted throughout the planned cities of Noida, Greater Noida, and Yamuna Expressway, as they attempt to capitalize on this situation. But as buyers, which neighborhoods should be our top priorities given the size of these cities?

Top 5 areas where Jewar Airport will be beneficial

Here is a list of the top five locations to invest in close to Jewar International Airport, based on factors such as the availability of residential stock and the potential for price appreciation brought about by additional upcoming developments.

Jewar, Greater Noida

Jewar is a suburban area only 2 km from the Yamuna Expressway. It is home to the notorious Dau Ji Mela and will soon be the location of the Noida International Airport. One of the main factors influencing buyer sentiment in this situation is connectivity, whether it be via road or air.

Other options are available to Jewar residents via the NH-334DD, which goes through the region.

The Noida Airport Rapid Metro corridor will also run through the area once the Jewar Airport is operational, linking it to the Delhi area’s Indira Gandhi International Airport, And that is not all! Other improvements to connectivity will improve Jewar’s vicinity, including:

The proposed 28-kilometer expressway from Jewar Airport to Kalindi Kunj in Delhi will connect Chola to Palwal Station via the new railway line.
An expected 28-kilometer expressway would run from Delhi’s Kalindi Kunj to Jewar Airport.

Property prices in Jewar have increased by 25% in the last few years as the many civic projects currently under construction. The residential inventory here is dominated by plots and land parcels, with an average plot rate of Rs 2,200 per sq ft currently found in Jewar.

This is comparatively cheap when you look at some of the larger nearby areas, such as Noida or Greater Noida.

Regarding the accessibility of fundamental facilities close to Jewar Airport, a few of the options that are within 3 km of the location are as follows:

Pragyan Public School
Blue Bird Public School
Kailash Hospital
Assaka Hospital
Amba Mall

The Yamuna Expressway’s Sector 22D

Situated on the Yamuna Expressway, Sector 22D is a rapidly developing residential hub and just a half-hour’s drive from the future Jewar Airport. The availability of well-known developers offering residencies at various costs draws prospective buyers to this neighborhood.

For example, investors seeking high-rise properties in recently launched projects might consider high-end developers such as Ace Group. However, Sector 22D Greater Noida provides ready-to-move-in flats by Supertech Builders, Orris Group, and Authority Flats by Yamuna Expressway if you want instant possession. A wide range of planned developments are also available to purchasers; the majority of these are governed by the Yamuna Expressway Industrial Development Authority (YEIDA).

At the moment, the average cost of real estate in Sector 22D is approximately Rs 8,300 per square foot for plots and lands, and approximately Rs 8,100 for apartments. However, Sector 22D Yamuna Expressway is regarded as one of the best areas to benefit from Jewar Airport for reasons other than the fact that apartments are readily available close to the airport.

Dankaur, Greater Noida

Another neighborhood, Dankaur, is only a 30-minute trip from Jewar Airport and provides prospective homeowners with several reasonably priced house options. In Dankaur, residential resale plots are widely available for Rs 11 lakh and above, with an average selling price of Rs 2,200 per square foot.

Since the Yamuna Expressway primarily facilitates connectivity near Jewar Airport, communities like Dankaur rely on this stretch for their commutes to Noida and Greater Noida. The Surajpur Industrial Area is only a 20-minute away. So Damnkaur homeowners can benefit from year-round rental advantages. Dankaur has many social amenities available, all within a 10-kilometer radius. Here, some of the most popular amenities are:

Situated on the Yamuna Expressway, Sector 22D, Greater Noida provides excellent access to neighboring social amenities. For example, the locality is only 8 km from Galgotias University, Noida International University, Krishna Hospital, and other places. The Sector 148 Metro Station on the Noida Aqua Metro Line is another alternative commute node; it is a 23-minute drive.

Educational Institutes	Healthcare Institutes	Recreational Spots
Gautam Buddha University	Shri Banke Bihari Hospital	Dhanauri Wetlands
N.S.P.D Public School	Kalash Hospital	Yamuna City Mall
Udai Public School	Guru Dayal Hospital	Sector-22B Shopping Center

Sector 150, Noida

A little further out of the suburbs, Noida’s Sector 150 is another excellent area that takes advantage of Jewar Airport. Despite being 45 km away, the proposed airport is readily accessible by car in 40 minutes because of Yamuna Expressway’s constant connectivity. The Noida-Greater-Noida Expressway and the Sector 148 Metro Station (Aqua Line) are two more important commuter hubs in this area.

The neighborhood has a great location advantage in addition to connectivity, as major business and commercial hubs like Sector 135, Sector 142, Sector 144, and Sector 153 Noida are only 14 km away. The neighborhood’s nearly 80% green open space content contributes to its overall liveability.

Combine this with the availability of renowned builders that provide contemporary, high-rise luxury homes, such as Godrej Properties, ATS Group, Eldeco Group, Mahagun Group, and others. However, what kind of appreciation in property value can buyers anticipate from this busy neighborhood? The flat/apartment rates in Sector 150 Noida and its historical price appreciation history are displayed in the table below.

Locality	Average Apartment Price	Price Appreciation in the 1 year	Price Appreciation in the last 3 years	Price Appreciation in the previous five years
Sector 150, Noida	Rs 10,700 per sq ft	27%	89%	98%

There is more! The extensive array of social amenities in Sector 150 Noida, some of which lie within ten kilometers, is another reason for preference. Below is a table that lists some of the most popular choices:

Educational Facilities	Medical Facilities	Recreational Facilities
GNIOT Group of Institutions	Prakash Hospital	The Grand Venice Mall
Galgotias College of Engineering	Apollo Cradle & Children’s Hospital	Inox Cinema
KR Mangalam World	Yatharth Super Speciality Hospital	MSX Mall
Greater Valley School	Gulshan One29

Chi 5, Greater Noida

Greater Noida’s Chi 5 comes last on our list of the best places to benefit from Jewar Airport. Chi 5 is only 40 minutes away by car from the soon-to-be airport, roughly 44 km away, and can be reached via the Yamuna Expressway. Furthermore, the location is only 17 km away from thriving commercial hubs such as Sector 132, Sector 135, and Sector 142 Noida due to its proximity to the Noida-Greater-Noida Expressway (5 km). The Surajpur Industrial Area (4.5km), Ecotech 2 (12 km), and Ecotech 111 (17 km) make Chi V one of the best housing hubs in terms of location.

Still, what kinds of properties should buyers search for in Chi V Greater Noida? The majority of the housing stock in the area is made up of contemporary, gated high-rise apartments, though there are a few isolated villas and plots. Purvanchal Projects, Nimbus Group, Earthcon Constructions, Amrapali Group, Proview Construction, and other prominent builders are leading the way for this reason.

Let us quickly review the average apartment prices in Chi V as shown in the table below, along with a glance at the historical price growth trajectory.

Locality	Average Apartment Prices	Price Appreciation in the last 1 year	Price Appreciation in the past three years	Price Appreciation in the previous five years
Chi V	Rs 8,300 per sq ft	38%	132%	122%

What’s more? Chi V, one of Greater Noida’s fastest-growing neighborhoods, is close to a variety of social amenities; some of the more well-liked ones are just five kilometers away and include:

The Great Venice Mall
JP International School
Samurja International School
Apollo Cradle & Children’s Hospital
Yatharth Superspeciality
MSX Mall

Considering the earlier stated details, Jewar International Airport is anticipated to yield substantial benefits and influence India’s aviation sector. The airport will open the door for more residential and commercial real estate development in and around its environs, so better connectivity is just one benefit. However, significant civic improvements are still being made to these prime locations that Jewar Airport will benefit. It is always preferable to consult a local real estate office to determine where to invest.

More than 1,500 acres of land that real estate developers have recently acquired through JDAs: a JLL report

Posted on July 1, 2024 by supriya

According to JLL, landowners and real estate, developers collaborated to develop 1,546 acres of land during the previous 18 months, from January 2023 to June 2024. There were 56 different Joint Development Agreements (JDAs) signed during this time. Development agreements have shown to be very effective in enabling developers to enter new markets and cities while giving landowners additional benefits. Furthermore, several renowned foreign developers who have recently joined the Indian real estate market have chosen to employ this tactic with encouraging outcomes.

Approximately 990 hectares of the 1,546 acres total JDAs were signed in 2023 alone, with the remaining 556 acres being signed in the first half of 2024.

Joint development agreements are still an option for national developers seeking to expand into new areas while sticking to an asset-light strategy, even though many now prefer outright land acquisitions. Over eighteen months, developers and landowners have come together to generate over 120 million square feet of development potential.

“Over the past 18 months, the residential sector has signed the most land Joint Development Agreements (JDAs). According to Dr. Samantak Das, chief economist and head of research and REIS, India, JLL, “proposed residential developments have a significant share of more than 97% (1,501 acres) in these signed agreements offering a development potential of 110 million sqft with an estimated gross development value of around Rs 99,460 crore.” “Real estate developers have been introducing new housing projects regularly due to the rising demand for housing in recent years. The number of new housing units introduced in India’s top 7 cities increased significantly in 2023, showing a 19% increase over 2022,” he continued.

Out of the 1,546 total acres, 45 acres were set aside for the development of commercial projects, most of which were office buildings with leases.

According to the city share analysis, smaller cities like Ahmedabad and Surat top the charts according to area transacted, while larger cities like Delhi NCR, Bengaluru, and Mumbai lead in the number of deals. The three larger cities accounted for just 26% of the total area, but together they hosted 36 deals, accounting for 64%. Smaller-scale transactions are primarily driven by land availability and cost in these larger urban areas. Nishant Kabra, head of JLL’s capital markets (North and West India), India, stated that the three cities– Delhi NCR, Bengaluru, and Mumbai— accounted for a significant Rs 83,927 crore, or over 84% of the total residential GDV (Rs 99,460).

Delhi NCR has been at the forefront of various transactions; since 2023, 20 JDAs totaling about 233 acres of land have been signed. There is a 36.5 million square foot potential development from these agreements. Most of these agreements, totaling 151 acres in the Delhi NCR, were signed in Gurgaon alone. Several legally binding deals have been entered into by prominent real estate players in Gurgaon, mainly along the developing Dwarka Expressway and Southern Peripheral Road corridors. Sonipat, Ghaziabad, Faridabad, and the NCT of Delhi accounted for the remaining deals in the NCR.

With nine deals totaling more than 102 acres and approximately 11 million square feet of development potential, Bengaluru came in second. Several deals were documented in Old Madras Road, Whitefield, and Yelahanka. Notably, a transaction involving more than 60 acres was recorded in North Bengaluru. Seven transactions totaling 62.5 acres, with a 9.9 million square foot development potential, were recorded in Mumbai.

Today marks the release of Kalki 2898 AD, starring Amitabh Bachchan, who purchased properties valued at more than Rs 100 crore in the past year

Posted on July 1, 2024 by supriya

Amitabh Bachchan, the star of Kalki 2898 AD, has been in the news lately due to his real estate holdings, particularly in the Mumbai real estate market. The Bollywood actor has spent more than Rs 100 crore on real estate in the temple town of Ayodhya and the financial hub of Alibaug during the past year.

Amitabh Bachchan registered three office units in Mumbai’s Signature building on June 20, 2024, paying approximately Rs60 crore. According to documents accessed from Floortap, the Bollywood actor paid Rs59.58 crore for three office units totaling 8,429 square feet in area.

Similarly, Bachchan paid Rs29 crore in September 2023 for four more apartments in the same Signature building, totaling over 8,396 square feet. Sara Ali Khan, Kartik Aaryan, and Manoj Bajpayee are among the other Bollywood celebrities who own office space in the same building.

Big B also bought a plot last year in Ayodhya, close to the Ram Temple, in The Sarayu, a plotted development project being built by The House of Abhinandan Lodha (HoABL), a Mumbai-based real estate developer.

The Kaun Banega Crorepati host paid Rs 10 crore to The House of Abhinandan Lodha (HoABL) in April of this year for a 10,000-square-foot piece of land in Alibaug, Maharashtra, which is close to Mumbai.

His son Abhishek Bachchan had previously registered six apartments in the Oberoi Sky City development in Mumbai’s Borivali West neighborhood on May 28, 2024. The Rs 15.42 crore purchase included six apartments with 4,894 square feet of RERA carpet.

High net-worth individuals, Bollywood stars, investors, and industrialists typically prefer investing in Grade A properties. Real estate consultants say commercial office spaces provide better returns than residential projects.

In Metro cities, commercial assets such as office space, retail space, and warehouses yield 6-10% gross rental yield, and in certain cases, even more. On the other hand, residential properties yield gross rental yields that range from 3% to 5%. On the other hand, advisors claim that land is among the most profitable investments if it helps for a long period and offers a higher capital appreciation.

“The goal of investment is the same whether discussing Bollywood celebrities or wealthy people. Capital appreciation and rental yields are the two key variables. This is the rationale behind real estate investments made by Bollywood celebrities and ordinary investors alike, according to Swapnil Anil, executive director and head of Colliers India’s Advisory Services division.

“New Bollywood stars tend to invest in established markets that offer a steady from rent cash and healthy capital growth. According to Swapnil Anil, capital appreciation is an investor’s primary concern when buying land.

This is what it will cost you to be neighbors with Sara Ali Khan, Arjun Kapoor and Shatrughan Sinha

Posted on July 1, 2024 by supriya

Sara Ali Khan, Arjun Kapoor, and Shatrughan Sinha— three Bollywood actors– might soon have new neighbors. A public notice to sell their properties has been served to the owners of Indus Projects Limited and the Union Bank of India for failing to pay. The prime property going up for auction has a reserve price of Rs 104.11 crore.

Sara Ali Khan, Arjun Kapoor, Shatrughan Sinha, and his family are among the Bollywood celebrities who live in the same neighborhood as the building.

The notice states that the bank plans to hold an auction for the promoters’ nine-story residential building. Located in Mumbai’s Juhu Vile Parle Development (JVPD), Kapolei Society in Vile Parle West, the building consists of seven 4BHK apartments and a duplex.

The nine-story residential property is situated in Nutan Laxmi CHS Ltd. According to the bank notice shared by Kecta, a platform that markets repossessed properties up for auction by banks and financial institutions, the plot is 800 square yards and is located in the Nutan Laxmi Co-operative Housing Society Ltd., North South Road, JVPD Scheme, Vile Parle (West), Mumbai.

The building is owned by Indus Projects Limited, a public company established in 1997. The notice listed Kishor Mehta, Abhai Mehtax, Mahavir Mehta, Madhur Mehta, and Indus Mechanical Engineering Company Private Limited as bank debtors.

The entire amount owed is approximately Rs 90.46 crore. According to the notice, the owners owe State Bank of India Rs 18.60 crore plus interest at the applicable rate, costs, dues, and expenses that may accrue from April 23 until the full repayment and settlement of dues.

They also owe the Union Bank of India approximately Rs 71.85 crore plus interest at the applicable rate, costs, dues, and expenses.

Under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) of 2022, the Union Bank of India is holding an auction for the bungalow.

According to Section 13(4) of the Act and Rule 8 of the Security Interest (Enforcement) Rules, 2002, the Authorized Officer has taken possession of the immovable secured assets because you did not comply with the notice within the allotted time.

The notice stated, “The immovable secured assets that the bank’s authorized officer has taken possession of will be sold by holding a public E-auction on June 20, 2024, by inviting bids from the public online on www.mstcecommerce.com, since the owners have failed to clear the dues of the secured creditor.”

There is a 25% off the list price on this offer. The entire transaction is cashless, and payment must be made through banking channels within 15 days of the auction date, according to Hecta’s founder and CEO, Sridhar Samudrala.

These are premium location ready-to-occupy floors that are ready to be owned. We hardly ever have access to such upscale properties, much less at a discount,” he continues.

Do you want to purchase a home at a bank auction? This is important for you to know.

Since banks only auction these properties when a loan borrower misses several payments, most of these real estate assets are offered below market value. The lender uses the auction to recoup the principal and interest balance owed for the loan.

Potential buyers of real estate at a bank auction should verify the property’s details, especially its legal specifications, before bidding.

Buyers are cautioned that expenses such as maintenance, property taxes, and electricity which are the buyer’s responsibility are not included in the reserve price listed.

The prospective buyer should also confirm whether the bank that promoted the sale took physical possession of the property after completing the necessary legal processes.

According to a legal expert, these properties are sold on an “as is where is,” “whatever is there is,” or “no recourse basis,” which means that the buyer must review the inclusions and exclusions and cannot back out of the agreement after the auction ends (unless there are extraordinary legal circumstances).

According to a legal expert, purchasers of apartments or bungalows up for auction should ascertain whether the properties are subject to any liabilities.

What factors will dominate India’s real estate market in 2024?

Posted on July 1, 2024 by supriya

An active real estate market in 2024 is due to the interaction of changing consumer preferences, government policies, and market dynamics.

In recent years, there has been notable growth in the Indian real estate sector. The first quarter of 2024 broke nearly the record set in the previous year, with 2023 announcing the most new projects over the prior ten years. According to a report, the residential real estate market anticipates a significant influx of new launches in 2024, with an estimated range of 280,000-290,000 units. This has paved the way for a successful 2024, demonstrating that the industry is not only expanding but also showing signs of continued expansion in the years to come.

What market factors will influence 2024?

India’s real estate industry has long been one of the main forces behind economic expansion, contributing significantly to the GDP. The industry has proven resilient and adaptable in the face of challenges to the GDP. The industry has proven resilient and adaptable in the face of challenges in recent years, including the COVID-19 pandemic, regulatory changes, and liquidity crunch. A gradual recovery in the market was observed in 2023, driven by favorable government policies, pent-up demand, and a rise in the industry’s adoption of digital technology. According to former Housing and Urban Affairs Minister Hardeep Singh Puri, the Indian real estate market is projected to grow to a $1 trillion sector by 2030 and contribute roughly 15% of the country’s GDP by 2025.

The Indian real estate market is viewed as a worldwide investment opportunity in addition to meeting local demand. NRIs in particular actively participate in the market in addition to being investors as a way of keeping ties to their home country. About 10% of all market investments as of the 2019-2020 fiscal year were made by non-resident individuals (NRIs). Currently, this percentage is at 15%, and by the end of 2025, it is expected to reach 20%. This demonstrates the market’s widespread appeal and the trust that non-resident investors have put in.

The Indian real estate industry’s upward trend is evidence of its resilience rather than the product of chance. The industry has maintained a consistent rise in rental yield despite the ongoing devaluation of the Indian rupee and the difficulties presented by the state of the world economy. This has fueled the sector’s growth, providing confidence in its stability and potential for further progress, favorable economic policies, and an emotional bond with the home country.

Buyer Trends and Market Dynamics: The trend of Upscale Living

India’s growing economy has made it more desirable for those with more disposable income to live lavish lives. The populace also looks for homes with extra features like swimming pools, fitness centers, and lovely gardens. Beyond HNIs and UHNIs, people in the upper middle class also want bigger living areas and higher income levels.

Considering the Environment

The building of sustainable structures has seen a significant shift in the Indian real estate market during the past two years. The real estate industry is improving living standards by employing environmentally friendly building materials, water conservation and management techniques, and energy-efficient building designs. Customers are looking for houses that align with their values and views. Homes with rainwater collection systems, renewable energy systems, and energy-efficient appliances are sought after by today’s buyers, especially those belonging to Generation Y.

Naturally occurring light and air are also permitted in sustainable homes, creating an impression of greater room and fresh air. This improves moods and lowers stress levels, which boosts productivity— especially for those who work from home. Although building green real estate costs a little more than building traditional homes, people can save a significant amount of money on their bills over time, making it an excellent investment.

Choices for Housing

Due to a lack of Ready-to-Move-In (RTMI) inventory and price increases in gated communities, buyers are gravitating toward individual homes, resale properties, and under-construction projects. Resale properties are highly sought after because they offer a nice living space without the hassle or expense of interior design. Homes that are still under construction are preferred because it is expected that after the project is finished, their costs will rise significantly.

Changes in Investment

Commercial real estate has historically been favored for investment because of its higher returns and lower maintenance requirements. On the other hand, a significant increase in residential properties’ rental yield during the past two years, combined with their affordability, has shifted the odds in their favor. There is a general expectation that residential properties will capitalize more quickly than their commercial counterparts due to the quick price rise.

Policies and Government Initiatives

India continues to deliver on its promise of affordable housing through successful government initiatives and programs. Since real estate accounts for more than 50% of household savings in India, these actions have a major impact on the industry. The Reserve Bank of India’s (RBI) decision to maintain its policy rate at this level is helping to support the rapid expansion of the housing sector. If this stability continues, there will likely be an even greater demand for housing.

Technology Use

The real estate market is rapidly transforming thanks to technology, making it easier for people to access and invest in properties. Property viewing through virtual tours and buying/selling a house at the click of a button will alter the face of house hunting. People can search for affordable homes outside of their proximity through the use of metro-based filters on Proptech platforms, thus reducing their daily commute time while also being able to access affordable homes. Online channels are gradually becoming a one-stop shop for all real estate services, increasing convenience and efficiency.

Modern buyers want a home that easily incorporates technology to improve their quality of life, not just any old house. The demand for smart homes is changing the real estate market. Examples include automated lighting and climate control, voice-activated assistants, smart security systems, and elevators with predictive maintenance services. The use of smart home technology has made a significant impact on buyer preferences and purchase decisions by differentiating properties on the market.

In conclusion, there has been a noticeable uptick in building activity since COVID-19, which has given the real estate market a fresh impetus. Home prices in India will keep rising to provide a stable future for the middle-class population who aspires to a luxurious lifestyle. The market is ready for a recalibration and stability in real estate prices as projects see an uptick and new launches get closer to completion. 2024 is not only a promising year for homeownership, but is also presents a wealth of opportunities due to the convergence of market dynamics, government initiatives, and changing homebuyer preferences.

Current Trends and Prospects for the Indian Real Estate Market

Posted on June 20, 2024 by supriya

By 2024 and beyond, the Indian real estate market will likely undergo a dramatic upheaval.

Changes in Regulation and the Economy’s Effect on Real Estate

Housing Plans and Government Policies

Changes in the nation’s economy and regulations in 2024 will impact the real estate market in the industry. Government policies, interest rates, and inflation are a few variables that will greatly influence market dynamics. Government policies, interest rates, and inflation are just a few variables that will greatly influence market dynamics. Government policies conducive to industry growth are expected to boost industry growth and may lead to steady investment inflows.

The Economic Factors Affecting Real Estate

The state of the economy will be crucially affected by trends in employment, inflation, and domestic growth. Demographic factors and urbanization will impact housing demand. Global economic conditions will also be important, with developed economies experiencing stable growth and emerging markets experiencing faster but more volatile growth.

Market dynamics and regulatory reforms

The laws governing the regulatory environment, such as the Real Estate (Regulation & Development) Act (RERA), will continue to affect the market’s economics. It will be important to consider tax laws and regulatory frameworks; certain nations have strict rules that guarantee compliance. To reduce project risks and ensure operational effectiveness, it is crucial to streamline regulatory procedures and deal with compliance obstacles.

Novel Patterns in Residential Property

Growth in Accessible Housing

A notable development in the residential real estate market is the growing emphasis on cost-effective housing options that provide a better quality of life. The mid-segment market wants upscale living amenities at reasonable costs, especially for luxury properties.

Transition to Sustainable Living

With the increasing prominence of environmental issues, there is a growing trend toward sustainable living. In response to the rising demand for sustainable homes, developers are increasingly implementing energy-efficient technologies and green building practices.

Remote Work’s Effect on Housing Demand

The demand for housing has been greatly impacted by the rise in remote work, with many buyers looking for homes with designated workspaces and improved connectivity. The residential real estate market in India is expected to change this trend.

Technological Progress Real Estate’s Shape

Digitalization in the Real Estate Sector

India’s real estate market is going through a major digital revolution. Prop Tech, or the application of technology to the real estate industry, is a major innovation engine. Apps that use virtual and augmented reality improve the viewing process by enabling prospective tenants or buyers to do remote property explorations. The process is becoming more transparent, effective, and user-friendly as a result of this digital shift.

PropTech Innovations

Real estate is being revolutionized by PropTech innovations. The marketing and sale of properties are being transformed by technologies such as home automation and artificial intelligence. AI in data analysis enables more accurate market predictions and property valuations. In 2024, innovation and technology will fuel a surge in real estate growth.

Role of AI and Big Data

Artificial intelligence and big data are transforming real estate transactions and the marketing landscape. Developed markets frequently lead in implementing advanced PropTech solutions, leading to more streamlined and efficient real estate procedures. AI’s ability to analyze massive amounts of data enables more precise market insights and improved decision-making, increasing the overall efficiency of the real estate industry.

Conclusion

As we approach 2024 and beyond, the Indian real estate market is to undergo a substantial upheaval. Economic conditions, government regulations, and technical breakthroughs have all contributed to the sector’s potential for growth and innovation. The patterns discussed in this article emphasize the market’s dynamic nature and the opportunity it provides for investors, developers, and homeowners alike. As the landscape evolves, remaining aware and adaptable will be critical to managing India’s complex real estate market. With the correct strategies and insights, stakeholders may capitalize on emerging trends while contributing to the sector’s long-term growth and resilience.

10 Things You Should Know About Election’s Impact on the Real Estate Sector

Posted on June 5, 2024 by supriya

During general elections, the real estate sector tends to slow down; there are fewer launches, and investors prefer a ‘wait and see’ approach. However, end-users may not be directly impacted, as they may decide to purchase a house when they find the right project in the market and the best deal that suits their pocket.

When uncertainty surrounds election results, real estate investors become cautious and anticipate potential policy changes. According to experts, there are fewer transactions and new launches during elections, and investors’ decisions may be influenced by market sentiment, share market performance, and even the impact of exit polls on markets.

Elections 2019: The Impact on the Real Estate Market

During its first term (2014), the government accelerated infrastructure development by implementing major policy overhauls such as DeMo, RERA, and GST, amending old Acts such as the Insolvency and Bankruptcy Code and the Benami Transactions (Prohibition) Act, and launching schemes such as 100 Smart Cities, Housing for All by 2022, Make in India, and AMRUT Cities. According to experts, the last five years (beginning in 2019) have seen the overall impact of their implementation on the real estate sector.

Also, during the 2019 elections, the primary and secondary markets slowed, and aspiring buyers and investors chose to wait and see. The momentum increased following the results, and buyers and investors were reassured of the government’s commitment to building new infrastructure.

It should be noted that India’s residential real estate sector experienced a significant slowdown from 2016 to 2019. The major market shake-up caused by policy reforms between 2016 and 2017 led to the NBFC crisis after the IL&FS issue in 2018. This created significant turmoil in the residential real estate industry.

According to Anarock Research, enough evidence suggests that housing sales and new launches may peak again in 2024.

Price trends for the last three elections

Examining price trends over the last three election years reveals that 2014 was better than 2019. According to ANAROCK data, average prices in the top 7 cities increased by over 6% in 2014, rising from Rs 4,895 per sq. ft. in 2013 to Rs 5,168 per sq. ft. In 2019, average prices increased by only 1% per year, from Rs 5,551 per sq. ft. in 2018 to Rs 5,588 in 2019.

Impact on Homebuyers

While it is true that many prospective homebuyers are waiting for the elections to be over before making a purchase, experts point out that end-users will be unaffected by any such factor and will buy a home as soon as they find the right product on the market.

Only investors will wait and see. Elections affect market sentiment but have little impact on end users. So, suppose a buyer finds a property that is populated. In that case, infrastructure has already developed, the price is right, and all of the fundamentals are in place, election or no election, he is obligated to buy it,” said experts.

According to Anuj Puri, Chairman of the ANAROCK Group, elections frequently signal the end of fence-sitting and a confident move to ‘buy’ positions for homebuyers.

The elections may impact markets where investors are the majority and speculators dominate.

Investors who intend to make ‘aggressive’ real estate purchases may prefer a ‘wait and watch’ strategy, but homebuyers will continue to buy based on their needs. According to experts, an investor’s decision today may be influenced by market sentiment or the ‘feel good’ factor, capital market performance, and whether the new government’s emphasis on infrastructure development will continue.

Elections also have an impact on builders. “During elections, the number of new launch announcements is often reduced because approvals may not be received due to the code of conduct. According to an unnamed developer, several projects in multiple categories, including mid-segment, affordable, and luxury, could be launched in the coming quarter.

How will the election results affect the real estate market?

A healthy absorption-to-supply ratio of 1.02 in 2022 rose to 1.17 in Q1 2024. According to the data shared by Anarock, controlled launches, and increasing sales, particularly in the high-end and luxury segments, have resulted in a drop in unsold inventory and a rise in prices.

“The residential real estate segment will probably reach a new high in 2024. This also suggests that home buyers are optimistic about the real estate market’s performance,” Puri explained.

Will there be an increase in the number of new launches after the 2024 elections?

In recent quarters, the residential real estate market in the top seven cities has set several benchmarks. Quarterly launches in these cities used to total more than 80,000 units per quarter in 2022. In recent quarters, the residential real estate market in the top seven cities has set several benchmarks. Quarterly launches in these cities used more than 80,000 units per quarter in 2022. However, it passed the 1 lakh unit mark last year, with launches exceeding 1 lakh in the previous five quarters. According to Anarock Research data, major developers have already acquired land for future development at a rate that is 125% higher than in 2021.

As of March 2024, unsold inventory had dropped to less than 6 lakh units, with an inventory overhang of only 14 months, down from 21 months a year earlier.

Will these new launches be in the middle, top, or affordable segments?

Launches in the mid-segment and higher-end have dominated accounting for more than 55% of the total supply. It is also noticeable that the share of luxury and ultra-luxury segments is increasing, accounting for nearly 25% of the total supply as of Q1 2024. “The new launches will primarily target these segments,” Puri explained.

Signature Global (India) Limited’s founder and chairman, Pradeep Kumar Aggarwal, believes that future launches will span all segments.

Will future housing prices be stable or increase?

Reducing unsold inventory, sales exceeding supply, and rising input costs are the key ingredients that will likely drive prices in the future. “We have already seen annual price increases ranging from 10% to 32% in various cities,” Puri said.

Should homebuyers decide whether to buy now or wait?

Unless homebuyers are looking for a luxury or high-end product in their preferred location, built by a preferred builder, or with a specific layout, view, or orientation, the average homebuyer should carefully evaluate the available options and close the deal by negotiating for the best offer.

Impact on Commercial Real Estate

The country’s expected GDP growth of $3.5 trillion to $7 trillion by 2030 can be sustained without significant changes in circumstances. “This sustained economic expansion will increase India’s appeal to global corporations, cementing its position as a prominent hub for establishing Global Capability Centers (GCC) and manufacturing facilities. Knight Frank India Chairman and Managing Director Shishir Baijal said growth significantly impacts the construction sector and improves employability.

Rental housing and affordable housing

A persistent decline in affordable housing demand is one of Baijal’s hopes for the new government. Keeping interest rates low and other enabling conditions can help achieve this goal. “We hope the government will take a closer look at the policy for affordable housing and provide more incentives to the supply side,” he told HT Digital.

Colliers report that foreign investors invest more than $4 billion in Indian real estate each year

Posted on May 29, 2024 by supriya

Foreign inflows rebounded in 2023, rising 20% over the previous year to $ 3.6 billion. These investments went beyond traditional channels, expanding into alternative asset classes and supporting the strong growth in the domestic office, residential, and industrial segments.

A favorable investment environment and rapid urbanization have established India as an attractive investment hub in the Asia-Pacific area because of its robust economy.

As a result, numerous new funds are actively considering the market, while established global and sovereign funds such as Mubadala, Mitsubishi Fudson, PAG Credit & Markets, Cadillac Fairview, Korea Investment Corp, and PNB Malaysia are either increasing their investments or forming new collaborations to capitalize on the Indian market’s burgeoning opportunities.

“2024 is expected to be a more dynamic year for both the Asia Pacific real estate markets and capital in the region, which will remain the dominant investor in global real estate. “The ability to act quickly, dig deeply into markets and sectors to identify value, and form productive partnerships will be critical to capitalizing on the region’s diversity and increased opportunity,” said Chris Pilgrim, Collier’s Managing Director of Global Capital Markets, APAC.

Strong economic resilience, a favorable investment environment, and rapid urbanization have made India a highly desirable investment destination for international funds.

With the International Monetary Fund (IMF) forecasting 5.7% GDP growth by 2024, India remains one of the world’s fastest-growing economies and a top choice among emerging Asia-Pacific (APAC) nations. Its appeal stems from attractive pricing, superior valuations, and promising yields for investors looking for profitable opportunities.

Foreign inflows rebounded in 2023, rising 20% from last year to $3.6 billion. These investments went beyond traditional changes, expanding into alternative asset classes and bolstering the strong growth in the domestic office, residential, and industrial segments.

New funds are expected to enter the Indian market shortly, maintaining investor interest. The residential, industrial, and alternative sectors expect renewed interest and income-generating office properties.

“Investments in Indian real estate have been consistent in recent years, and they are likely to grow further as demand for capital changes structurally. Global investors have always been at the forefront, investing an average of $4 billion annually for the last five years, demonstrating their continued commitment and confidence in the sector. With an increase in performance credit, special situations, portfolio acquisitions, asset reconstruction, and related structures, the sector is expected to attract even more investment in the coming years,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India.

APAC countries show increased interest in Indian real estate.

While the United States and Canada remain primary sources of capital, prominent APAC countries such as Singapore, Hong Kong, South Korea, and Japan are increasingly focusing on India’s burgeoning real estate sector. In 2023, investment inflows from the APAC region increased by 57% annually to $ 1.8 billion, with office assets accounting for 70%.

Aside from office properties, APAC countries have shown interest in residential, industrial, and warehousing assets. The volume of investments has nearly doubled since 2019, indicating a significant increase in investor enthusiasm and confidence in India’s real estate sector.

Looking ahead to 2024, investors are likely to become more involved in India’s real estate sector. This urge is driven by the country’s strong economic growth, favorable business conditions, and rising demand in numerous industries. The expectation of increased activity indicates confidence in the policy landscape, a narrowing gap between buyers and sellers, and investors’ eagerness to allocate more capital across various real estate asset classes.

“In 2023, foreign investors accounted for 90% of all investment inflows into India’s office sector, demonstrating the strength of the underlying asset class. The industry is currently transforming. Furthermore, as sustainability becomes more important in investment decisions, the real estate sector, including India’s office market, is poised to align seamlessly with global Environmental, Social, and Governance (ESG) standards,” said Vimal Nadar, Senior Director and Head of Research at Colliers India.

Indian REITs are expanding rapidly as office demand surges

Posted on May 21, 2024 by supriya

With a market capitalization of $8 billion, three office REITs collectively own approximately 100 MSF of space, or about 12.5% of the total office stock.

All metrics of office demand in India are showing positive momentum, and real estate investment trusts are rapidly expanding their portfolios through acquisitions.

When Embassy Office Parks REIT was launched in 2019, it had slightly more than 24 million square feet. In five years, it has increased its completed area by 47%, adding 12 million to 12 million square feet through acquisitions. It now has over 45 million square feet of gross leasable area.

The three office REITs- Embassy REIT, Brookfield India Real Estate Trust, and Mindspace Business Parks REIT– collectively own approximately 100 million square feet of office space, accounting for 12.5% of India’s total office stock, with a market capitalization of $8 billion.

India’s office sector demand is growing by double digits. The monthly rental square foot is approaching the Rs 100 mark. Occupancies have risen to the mid-80s. Most significantly, globally capability centers have focused on India, with approximately 800 GCCs expected to be added over the next 6-7 years, increasing demand for offices.

Acquisitions

Embassy REIT acquisitions have primarily come from its sponsor, the Embassy group, based in Bengaluru, and all of its assets are concentrated in India’s IT capital. Last month, it arrived in Chennai with another acquisition from its sponsor, a 5 MSF business park that will take its total portfolio above 50 MSF. It also has a future development area of 2 MSF.

Brookfield REIT increased its operating area by 47% last year, primarily through acquisitions, and another 16% increase is expected following an acquisition announced last week.

In FY24, it acquired 6.5 million square feet of space in the National Capital Region and Mumbai, and it plans to add another 3.3 million square feet by purchasing Bharti Enterprises’ 50% stake in a joint venture with its parent entity Brookfield. The REIT has the first right to offer the remaining stake, while other properties developed by Bharti Realty in Delhi are potential acquisition targets.

Its parent, Brookefield, owns 54 million square feet of office space in India, which serves as an opportunity pipeline for the REIT.

Last year, Mindspace REIT made two small acquisitions in Chennai and Pune, while also developing a mixed-use asset for its sponsor in Mumbai. It also has the right to first offer on other assets that its sponsor owns. Its sponsor, K Raheja Corp, has approximately 15 million square feet of pipeline in the form of completed or in-development assets. This presents a potential growth opportunity for the REIT since it’s also looking into third-party assets.

According to a recent CREDAI-CRE Matrix report, office demand will exceed 70 million square feet by 2024, due to the government’s emphasis on manufacturing expansion and investing in digital and physical infrastructure. Each of these is expected to boost office absorption and create new opportunities for REITs.

Fractional ownership is driving a paradigm shift in real estate investment

Posted on May 21, 2024 by supriya

Fractional Ownership is an investment model aimed at retail investors who can gain access to the high-value commercial segment.

With the real estate sector expanding across key markets, driven by demand sales, investors are increasingly looking for ways to capitalize on the bullish run. The real estate sector has matured due to regulatory changes, which has sparked investor interest. What truly democratized the industry was the introduction of investment concepts such as Fractional ownership, which allows individual or retail investors to invest in high-value properties while earning fixed returns on rent-generating assets.

While alternative investment options such as AIFs and REITs are gaining popularity in India as profitable and effective investment vehicles, they are primarily geared toward institutional and high-net-worth investors. On the other hand, investment models such as Fractional Ownership are aimed at retail investors, who can access the high-value commercial segment through this model. The good news is that this model provides new avenues for retail investors yet allows developers to consider various funding options.

According to a report by a leading real estate consultant, the market for fractional ownership in India was USD 5.4 billion in 2020 and is expected to reach USD 8.9 billion by 2025, growing at a 10.5% CAGR. This is an unambiguous sign of fractional ownership’s rapid growth as a viable investment opportunity.

Fractional Ownership became more popular among investors after SEBI proposed various Fractional Ownership Platforms (FOPs) to register with SEBI MSM REITs and made it mandatory to follow some specific registration procedures. According to the proposal published by a leading real estate firm, MSM REITs should include separate and distinct entities serving as trustees, sponsors, and investment managers. SEBI also proposes that MSM REIT be established as a Trust under the Indian Trusts Act, with the ability to create separate schemes for owning real estate assets. This would be accomplished through SPVs (Special Purpose Vehicles) established as companies under the Companies Act of 2013. MSM REIT Scheme shall have complete control and 100% equity share capital in all SPVs.

These regulatory changes benefited investors because they can now leverage benefits such as fair pricing, transparent transactions, and the flexibility and opportunity to exit or liquidate their investment at any point.

With the digitization and technological advancement of the real estate industry, investors can also benefit from easy tracking via web-based FOPs, making it easier for them to make data-driven decisions. It also provides visibility previously unavailable when proper real estate investment space was not in place.

Diversification is another important factor that has redirected investors to fractional ownership, particularly since the pandemic, when the stock and commodity markets have become volatile. The uncertainties caused by global economic headwinds necessitated the exploration of more promising avenues and markets. In contrast, India’s real estate market has continued to show promise, with the commercial segment breaking records for leasing and demand. According to a report, the Indian Commercial Real Estate Market is expected to grow at a CAGR of 21.1% between now and 2028, from USD 33.62 billion to USD 87.57 billion.

As India’s ease of doing business index ranking improves in the coming years, more global corporations will establish their headquarters here. Global occupiers in sectors IT, manufacturing, BFSI, startups, and the booming service industry will require high-quality workspaces for their employees. These will result in more Global Occupier Centers (GCCs) operating from India’s key cities, thus increasing and accelerating demand for Grade-A office assets. In this scenario, fractional ownership will benefit both developers and investors. As the sector grows, fractional ownership will continue to open up new opportunities for investors in the coming years.

Real estate employment skyrockets

Posted on May 16, 2024 by supriya

According to recent findings, Sashi Kumar, Head of Sales at Indeed India, stated, “The construction industry provides enormous opportunities for skilled professionals and semi-skilled labor.

According to Indeed’s recent survey, hiring in the construction and real estate sectors increased by 86% between March 2023 and 2024. This surge in demand has conceded with a 57% increase in job seeker’s interest, with Delhi, Bangalore, and Mumbai leading the way.

According to Indeed data, the top three cities for construction hiring are Delhi (5.05%), Bangalore (4.68%), and Mumbai (4.13%). A strong business environment, a rise in warehousing and industrial needs, increased commercial housing requirements as migration rises, the opening of manufacturing facilities, and other factors could all contribute to this trend.

However, smaller cities like Ernakulum (2%), Kochi (1.50%), Lucknow (1.38%), and Calicut (1.25%) are among the top regions attracting job seekers. This trend could be attributed to low living costs or local job opportunities that allow people to work closer to home. Ernakulum, Calicut, and Kochi are the top Tier 2 and 3 cities for job postings.

Engineers (17.18%), project leads and supervisors (8%), and architects (5%) are the most popular job roles, accounting for the majority of job postings. Engineers (21.31%), project leads and supervisors (9.33%), and architects (4.27%) are also popular among job seekers, which is consistent with the demand. As construction becomes more complex and technical, the industry requires more skilled workers.

The construction industry remains a key driver of economic growth, offering numerous opportunities for skilled professionals and semi-skilled workers. The significant increase in hiring signals promising opportunities for job seekers and employers, while the increase in job seeker interest reflects the industry’s strong momentum.

Who is investing in Indian real estate, and where? Check this report.

Posted on May 16, 2024 by supriya

According to a Cushman & Wakefield report, the Indian real estate sector received USD 1.1 billion in investments in Q1 2024, with the residential real estate sector outperforming other asset classes and attracting investments of nearly $693 million.

In recent quarters, the residential sector has been on an upward trend, driven by strong housing demand and resurgent supply. It has also attracted a great deal of capital from investors in Q1 2024, who are banking on the segment’s bull run, which accounted for more than 63% of total realty investments in the quarter.

In absolute terms, the Q1 2024 investment inflow into the residential market is twice the quarterly average over the previous eight quarters.

Furthermore, nearly 48% of investment in the residential sector was concentrated in the early stages of development across the top eight cities, indicating increased investor interest, a steady rise in residential capital values across cities, and a growing share of high-end luxury launches.

Who is investing the most?

According to the report, domestic investors maintained a strong investment momentum, accounting for 57% of total quarterly investments. Foreign investors and collaborative (or mixed) deals accounted for 43% of the inflows in Q1 2024. This is consistent with the trend observed in 2023 when domestic investors participated in Indian real estate.

In terms of city-specific split, Bangalore led the way, accounting for 25.6% of total investments in Q1 2024, with more than half of the share going to the city’s office sector. Pune ranked second in terms of investment volume, accounting for 14%.

Investment in equity

Equity investments in the real estate sector stood at 58% in Q1 2024, while debt investments increased to double the quarterly average level of the previous eight quarters, with almost all of that going to the residential sector.

The office sector remained the preferred sector among equity investors, accounting for 43%, closely followed by residential investments (38%). Despite a slowdown from the previous quarter, early-stage deals remained consistent with the average in-flows over the last eight quarters.

In addition, corporate transaction volumes increased by 65% year on year, reaching INR 12.78 billion (USD 0.15 million). Mumbai continued to drive transaction value, accounting for 57% of the total, followed by Pune at 33%.

According to Somy Thomas, MD of valuation & advisory and capital markets at Cushman & Wakefield, “Q1 2024 saw another strong quarter of capital inflow into the Indian real estate sector, with residential dominating due to renewed customer and investor confidence. This strong performance has piqued investors’ interest, prompting them to invest in a market that is expected to grow even more.

“Domestic investors increased their investment in the quarter, providing additional protection against potential global headwinds while strengthening India’s domestic market and investor interests. As we start the new fiscal year, we expect this momentum to continue, with potentially more diverse investments in the future.

This expert believes that the power of real estate is at the heart of India’s transformation

Posted on May 6, 2024 by supriya

According to Ankur Gupta of Brookfield Asset Management, local businesses are upgrading office spaces. Indians are looking for higher-quality homes, hotels, restaurants, and vacations, reflecting significant lifestyle changes over the last few decades.

According to Ankur Gupta, Managing Partner and Head of APAC and ME Real Estate at Brookfield Asset Management, the sector contributes significantly to the economy directly and indirectly and thus is at the heart of India’s recent transformation.

“Real estate provides that house, that backbone, not only by directly contributing to GDP but also by increasing productivity. A good quality real estate establishment, whether a manufacturing hub, logistics infrastructure, offices, high-quality homes, or hospitality, is the foundation for various industries. Gupta cited steel, cement, paints, and tourism as examples of direct users or secondary contributors to hotels.

He cited the fact that local businesses are increasingly looking to transform their office spaces, and Indians want to live in higher-quality homes, visit higher-quality hotels and restaurants, and take vacations that were less desirable several decades ago.

Brookfield, he says, is very interested in these shifts in demand, and the next major motivator would be to support the growth of the country’s manufacturing system and the development of logistics and industrial hubs.

These transformations will necessitate massive amounts of capital, a collaborative approach with the government and various state bodies, and the cooperation of organizations such as Brookfield.

India’s unique combination of services and manufacturing will propel it to global leadership. It makes no difference if it is second or third. He believes that it is currently the best market in the world to invest in.

A study predicts that residential real estate prices in India will increase by 4-6% this year

Posted on May 6, 2024 by supriya

According to a report released on Tuesday, home prices in India are expected to rise by 4-6% this year, with rising per capita income driving demand.

CRISIL Ratings believes that moderate inflation, stable commodity prices, lower fiscal deficit, and a drop in global policy rates will pave the way for interest rate cuts to boost housing demand.

“Range-bound growth in capital values and a likely moderation in interest rates in the second half of this fiscal year will ensure affordability improves after a decline in the previous two fiscal years due to a sharp increase in interest rates and capital values,” it said.

In terms of sales, the market share of India’s 11 listed real estate developers is expected to double to 30-32 percent this year, up from 15% in the pre-pandemic fiscal year 2018-19.

DLF Limited, Brigade Enterprise, Godrej Properties, Kolte-Patil Developers, Microtech Developers, Mahindra Lifespace Developers, Prestige Estates Projects, Puravankara, Sobha, Shriram Properties, and Sunteck Realty have a track record of delivering on time and with quality.

According to CRISIL Ratings, “continuing premiumization,” affordability, and rising per capita income should help large, listed residential developers achieve a 10-12 percent increase in sales volume this year, up from an estimated 14% growth last year.

“Large developers have already strengthened their credit profiles by deleveraging balance sheets through strong sales and collections over the last two years and focusing more on asset-light models, such as joint ventures and joint development,” said Pallavi Singh, associate director at CRISIL Ratings.

Real state supply has shifted towards mid-to-high-end and luxury homes, while launches in the affordable segment are expected to remain muted. According to the report, the share of launches in the mid-to-premium and luxury segments is expected to be 55-60% in 2023-24, up from 30-35% before the pandemic.

PropertyWala.com

India's Premier Real Estate Portal

PropertyWala.com

Tag Archives: Indian Real Estate market

The elimination of indexation benefits in real estate will discourage secondary market sellers

Mumbai Rains: During the monsoon, the walk-in homebuyer’s activity slows down, impacting housing transactions

Govt should prioritize housing to boost the real estate market, according to developers

Five things the real estate industry anticipates from the finance minister’s budget in 2024

India’s commercial real estate market: Surpassing the global recession

Tenant news to rejoice about! The April-June quarter saw an average price correction of 5-10% in Bengaluru’s rental housing market

Bengaluru is the top option for Indian non-residents looking to buy mid-range and affordable homes

Which hotel chain has the highest market value in India?

How come India’s luxury real estate marketing is rebounding?

Why do wealthy Indians own the most real estate in London?

Section 106 of the Transfer of Property Act: Important Information for All Property Owners

Prominent areas near Jewar International Airport with room to grow

More than 1,500 acres of land that real estate developers have recently acquired through JDAs: a JLL report

Today marks the release of Kalki 2898 AD, starring Amitabh Bachchan, who purchased properties valued at more than Rs 100 crore in the past year

This is what it will cost you to be neighbors with Sara Ali Khan, Arjun Kapoor and Shatrughan Sinha

What factors will dominate India’s real estate market in 2024?

Current Trends and Prospects for the Indian Real Estate Market

10 Things You Should Know About Election’s Impact on the Real Estate Sector

Colliers report that foreign investors invest more than $4 billion in Indian real estate each year

Indian REITs are expanding rapidly as office demand surges

Fractional ownership is driving a paradigm shift in real estate investment

Real estate employment skyrockets

Who is investing in Indian real estate, and where? Check this report.

This expert believes that the power of real estate is at the heart of India’s transformation

A study predicts that residential real estate prices in India will increase by 4-6% this year