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July 20, 2018 in Uncategorized

India’s office leasing crosses 20 million sq ft in the first half of 2018: Report

India’s office leasing crosses 20 million sq ft in the first half of 2018: Report

July 18, 2018 in Investment News, Leasing News

Office leasing activity across India’s top 9 markets rose more than 10%, with the total leasing of over 20 million sq ft during the first half of 2018. Bangalore along with Delhi-NCR, Hyderabad and Mumbai led the leasing activity with 80% share, showed data from CBRE South Asia. Continuing the trend, office space take-up was dominated by small- and medium-sized transactions. Small-sized transactions with less than 10,000 sq ft space accounted for around 44% of the transaction activity, while mid-sized transactions ranging between 10,000 sq ft and 50,000 sq ft held a 42% share. The share of large-sized deals with over 100,000 sq ft also rose marginally from 4% in the previous quarter to about 5%. “Corporates are likely to remain cost-sensitive, develop workplace strategies for efficient space utilization, which will impact the office space absorption. We foresee pre-commitments in quality, cost-effective projects nearing completion which will have a significant impact on office leasing activity across key cities,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE. Occupiers continued to future-proof their portfolios and hedge against future rental escalations by pre-leasing space across various cities. Pre-leasing activity rose significantly in the second quarter largely in Delhi-NCR, Hyderabad and Pune drove primarily by Banking, Financial Services and Insurance (BFSI), research, consulting and analytics. Around 17 million sq ft office space supply was added during the period and this was the increase of over 50% compared with the first half of 2017. Four cities including Bangalore, Mumbai, Hyderabad and Delhi-NCR accounted for more than 80% of this supply addition, followed by Chennai. Sustained occupiers’ interest resulted in rental values rising in the range of 1%-7% across micro-markets in Bangalore, Chennai and Pune. “Office leasing activity is expected to remain stable in the short term, backed by corporates looking to expand or consolidate their operations. Across all cities, rising traffic congestion and public infrastructure have become key decision-making parameters significantly impacting location strategies of occupiers,” said Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia. He expects infrastructure initiatives such as completion of highways and introduction of Mass Rapid Transport System (MRTS) services among others to significantly influence and drive occupier preferences in the coming quarters. According to experts, the direct impact of Goods & Services Tax on the office sector remains limited, despite an increase in occupier outgo as the rate now stands at 18% compared with the previous 15% service tax. Going forward, they expect this tax rate increase to have a negligible impact on leasing momentum. Prominent sectors such as BFSI, engineering & manufacturing, research & consulting and co-working are likely to account for a larger share in leasing activity on a yearly basis. Sources:

Stamp Duty and its Charges on Property? You Should Know About This.

Stamp Duty and its Charges on Property? You Should Know About This.

July 16, 2018 in Defination, Investment, Real Estate News

Stamp duty is a government tax that is imposed on property transactions. It is payable under the Section 3 of the Indian Stamp Act, 1899. One needs to pay the stamp duty at the time of property registration. The amount of stamp duty varies from city to city and also according to the real estate type. Since stamp duty is added to the cost of the property, it is better to have an idea before you finalize the deal of your property. Also one need to pay stamp duty on time, otherwise, you will be charged penalty for the delay. In any kind of delay 2% penalty charge is added every month to the charge. This penalty charge can maximum go to 200% of the actual charge. The stamp duty in Delhi charges are:

  • Stamp duty is @3% if it is done by a woman and @5% if it is done by a man
  • The registration fee is 1% of the total value of Sale Deed + Rs. 100/- as pasting charge.
Though, the charges vary from state to state and according to the property type. Here, have a look at the charges in different states of India.
  • Haryana- 12.5% of consideration
  • Chhattisgarh- 7.5% of consideration
  • Punjab- 6% of consideration
  • Madhya Pradesh- 7.5%
  • Tamil Nadu- 8%
  • Bihar- 7% + 2%
  • Assam- 8.25% of consideration
  • Maharashtra- 10%
  • Rajasthan- 11%
  • Meghalaya- 4.6% (up to 50K), 6% (50K-90K), 8% (90K- 150K), 9.9K (up to 150K)
  • Uttar Pradesh- 8%
  • Nagaland- 7.5% of consideration
  • Jharkhand- 7% + 2%
  • Tripura- 5% of consideration
  • Kerala- 8.5%
  • Goa- 8% of consideration
  • Karnataka- 10%

What is Property Registration?

Property registration is a process of registering the documents related to your property according to section 17 of the Registration Act, 1908. When you register the purchased property, you need to pay stamp duty on property and registration charges for the same. When you purchase a flat or property directly from the builder, the registration of property gives you the right to legally use, own and dispose of the property. And when you purchase a flat or a property which is being transferred from one hand to another for the second time, you will have to pay registration charges. The process of property registration is done at the office of the sub-registrar and that has jurisdiction over the area in which the property is situated or bought. In Indian states, land registration involves a computerized process, where middlemen are not required.

GST impact on Stamp duty and Property Registration

Stamp Duty on property & Registration charges remains unchanged. These charges collected are different in each state. Generally, Stamp duty is between 4-10% and registration charges vary from 0.5-1% of property value.

When is the Stamp duty payable?

The stamp duty is payable before the execution of the legal documents that is property registration. When you are buying a property, the stamp duty is generally paid within 30 days of settlement of property document.

What is the Penalty charge?

If there is any delay in the payment of stamp duty, then the extra charge is added to the stamp duty charge and that extra charge is called a penalty charge. The penalty charge is generally 2% for each month the stamp duty charge is delayed. This penalty charge can go a maximum of 200% of the actual stamp duty amount.

Who is liable to pay?

For stamp duty on property, the buyer/purchaser is liable to pay the charges. But in the case of exchange of the property, both the parties have to pay charges equally.

Documents required for Stamp Duty:

The documents you need to carry may vary from state to state, but given below are some of the documents which are generally required for stamp duty:
  • Deed of partition
  • Power of attorneys
  • Conveyance of mortgaged property
  • Mortgage deed
  • Transfer instruments
  • Lease deeds
  • Certificates of sale
  • Gift Deed
  • Exchange deed
  • Tenancy agreement
  • License agreement

How to Pay Stamp Duty?

There are 3 different ways to pay stamp duty on property:
  • Physical appearance and stamp paper
Being physically present is one the most basic way to pay stamp duty, as you can yourself legally do all the paperwork for yourself. By being physically present, you need to purchase a non-judicial stamp paper with the impressed stamp. Once you are done with purchasing the stamp paper, then all the details regarding the transaction can be written or typed. Though, finding an authorised vendor selling stamp paper is not an easy task. Many times, there is a shortage of form/ stamp paper and you must again next day. Also, if the amount to be paid as stamp duty is big, then you may require many stamp papers. Although, nowadays many people do not prefer paying stamp duty by being physically present as it takes a lot of time.
  • Franking
Franking is the process where a franking agent puts a stamp on your documents, which indicates that the stamp duty has been paid. Before executing the transaction, you must contact an authorized band who will then act as a franking agent to deposit the stamp duty. Every state has different franking charges, a minimum amount is prescribed for franking to every state. Thus, you need to refer to the charges according to the state you live in.
  • E-Stamping
To make stamping easy, the government has introduced a new way to pay charges and this process is called E-stamping.  Nowadays, in many states, E-stamping is compulsory as it is done online. The best part of E-stamping is that you do not have to search for authorized vendors to buy stamp papers, you can easily get stamp papers for E-stamping on Stock Holding Corporation of India Limited (SHCIL). Stock holding corporation of India Limited has been appointed as an official stamp paper vendor for e-stamping.  SHCIL is also known as the central record of keeping agency for the total e-stamps used. To pay stamp duty through e-stamping, you must visit Stock Holding Corporation of India Limited (SHCIL) website. There you must select your state to check if e-stamping is available in your state. Then, you will get all the information that you need while paying stamp duty. Now you must fill up the application form available on the website and then give it to the collection centre of stamp duty along with the charges. Sources:

Delhi’s Connaught Place World’s Ninth Most Expensive Office Area: Report

Delhi’s Connaught Place World’s Ninth Most Expensive Office Area: Report

July 13, 2018 in Investment News, Real Estate News

Connaught Place in Delhi is the ninth most expensive office location in the world, a CBRE report said here on Wednesday. "Delhi's Connaught Place moved one notch up to be the ninth most expensive office location with an annual prime rent of $153.26 per square feet from last year's tenth most expensive office location," said the report titled "Global Prime Office Occupancy Costs 2018". Meanwhile, Mumbai's Bandra Kurla Complex moved down to the 26th position with an annual prime rent of $96.51 per square feet and the central business district in Nariman Point, Mumbai fell from 30th to 37th position with an annual prime rent of $72.80 per square feet, it said. The most expensive office location in the world is Hong Kong (Central) with an annual prime rent of $306.57 per square feet, according to the report. The city held on to the top position for the second consecutive year, it said. London (West End) and Finance Street in Beijing were second and third on the list.

CBRE's Chairman, India and South-East Asia Anshuman Magazine said: "Strong demand from finance, technology and the e-commerce sectors has fuelled the growth momentum in prime occupancy costs from last year and commercial office market remains a strong growth propeller for the real estate sector." Sources:

PE investments in Indian real estate hit Rs 59,100 cr in 2017: Knight Frank

PE investments in Indian real estate hit Rs 59,100 cr in 2017: Knight Frank

July 11, 2018 in Investment News, Knight Frank

Even as real estate in India has struggled over the past few years, private equity investors appear quite optimistic about its prospects. A report by Knight Frank says that PE investments in real estate rose from Rs 17,200 crore in 2014 to Rs 59,100 crore, a growth of a whopping 36 per cent compounded. Much of the PE investments found their way into a commercial real estate. Since 2011, a total of Rs 57,300 crore has been invested into space According to the Realty Asset Monetisation 2018 – An Overview by Knight Frank, Mumbai captured 40% of private equity investments into office assets in India while NCR saw Rs 11,350 crore being invested. Bengaluru attracted private equity investments into office assets to the tune of Rs 7,850 crore. Retail and warehousing have also seen a strong performance during the last four years. The warehousing sector has seen an investment of Rs 28,136 crore since 2014, says the report, while Rs 10,362 crore has been invested into retail assets since 2011. When it comes to retail, nearly half the incremental capital has gone into the new development and under-construction retail assets. “The real estate industry has been through a churn over the past few years due to a slew of structural reforms like demonetisation, GST and RERA. This led to a reduction in investment risk perception coupled with the availability of matured assets," said Shishir Baijal, Chairman & Managing Director, Knight Frank India. The exuberance by PE investors continues in the current year with Rs 33,700 crore already being invested in the first half of 2018. "While office market has continued to remain strong, a closer look indicates that once-overlooked segments of retail and warehouse have seen a renewed interest from global institutional investors,” said Baijal. Sources:

Indiabulls Real Estate to buy back shares

Indiabulls Real Estate to buy back shares

July 9, 2018 in Indiabulla, Investment News, Real Estate News

Realty developer Indiabulls Real Estate has approved the proposal to buy-back up to 2.6 crore equity shares of the company aggregating up to Rs 624 crore. The maximum size of the buy-back is around 5.45% of existing paid-up share capital of the company, the developer said in a regulatory filing.

The maximum offer price for the proposed buyback will be the prevailing market price on stock exchanges subject to a price not exceeding Rs 240 per equity share. The aggregate value of the buy-back is less than 10% of total paid-up share capital and free reserves of the company. “The proposed buy-back will make the balance sheet of the company leaner by the reduction in the overall capital employed in its business, which in turn will lead to higher earnings per share and enhanced return on equity,” the company said. On Friday, shares of Indiabulls Real Estate closed at Rs 205.70, down 2.67% over the previous close. The public announcement setting out the process, timelines and other statutory details will be released in due course in accordance with the buyback regulations. Sources:

Manesar Land Scam: 3,600 Claims For Plots, Flats On Government’s Table

Manesar Land Scam: 3,600 Claims For Plots, Flats On Government’s Table

July 6, 2018 in Investment News, Manesar Land Scam

The government has received around 3,600 claims for plots and flats that were ensnared in the Manesar land scam, according to a reply to an RTI query. In March this year, the Supreme Court ordered that the ownership of 688 acres of land that the Bhupinder Singh Hooda government had issued an acquisition notification for in 2004 but withdrawn subsequently — triggering distress sales in the interim to builders who promised more than the compensation the state was offering — would pass into the hands of government agencies HSIIDC and Huda. The scam was estimated at Rs 1,500 crore with land being bought from locals at throwaway prices. The Supreme Court had said all homebuyers who had bought properties in projects developed on the land in question were entitled to claim their properties. The claims were supposed to be filed within a month of the judgment. But for nearly the entire period, the Haryana government had not decided if Huda or HSIIDC would accept the claims. Ultimately, in April, HSIIDC was chosen as the agency for accepting claims from homebuyers as well as landlords. The ABW Manesar Allottee Welfare Society has also filed a petition seeking clarification of the Supreme Court order. One of the petitioners, Naresh Jindal, said the court had directed claims for possession or refunds could be filed to Huda or HSIIDC but there was no clarity on the interest applicable or the timeline. The RTI query was filed by Aseem Takyar. Sources:

IT Department Attaches Benami Properties Worth Rs 43 Billion

IT Department Attaches Benami Properties Worth Rs 43 Billion

July 4, 2018 in Benami Properties, Real Estate News

The Income Tax Department has attached over 1,500 ‘Benami’ properties worth Rs 43 billion in the last one and half years, around the same time as the introduction of the revised benami legislation, a financial daily has reported. According to a report in the Business Standard, Jaipur and Mumbai top the list, each with an attachment of 200 properties. This is followed by Lucknow with an attachment of 50 properties, Kolkata at 144, Chandigarh at 110 and Hyderabad at 100 properties. Patna has seen the least number of property attachments at 30, the report added. “The I-T department has worked swiftly in identifying benami transactions since the enactment of the revised legislation. Over 1,500 properties have been attached so far. Many are on the radar. Search and surveys are on involving gold dealers, bankers, hawala operators, senior government officials, and politicians, etc,” Business Standard quoting a senior government official wrote. With a view to curbing the menace of black money, Parliament in August 2016 had passed the Benami Transactions (Prohibition) Act, after assurance from Finance Minister Arun Jaitley that genuine religious trusts will be kept out of the purview of the legislation. While the existing law provides for up to three years of imprisonment or fine or both for carrying out benami transactions, the amended legislation would provide for seven years imprisonment and fine. The Act defines benami transactions, prohibits them and further provides that any violation is punishable with imprisonment and fine. The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner. While the 1988 Act had nine sections, the amended law has 71 sections. With Agency Inputs Sources:

One year of GST : Benefits and Losses

One year of GST : Benefits and Losses

July 2, 2018 in GST, Investment News

"Good and Simple Tax" -- that is how Prime Minister Narendra Modi introduced the Goods and Services Tax (GST) to Indians, in his speech at the launch of the new tax regime a year ago. GST was rolled out in the intervening night of June 30 and July 1, last year, in a ceremony held in the Central Hall of Parliament. The government has planned a mega event to celebrate the first anniversary of GST on July 1, which has now been christened 'GST Day'. "Union Minister for Railways, Coal, Finance & Corporate Affairs Piyush Goyal will preside over as the Chief Guest of the event and Minister of State for Finance, Shri Shiv Pratap Shukla will be the Guest of Honour," the finance ministry said in a statement. Union minister Arun Jaitley who was instrumental in the implementation of GST would be addressing the gathering through video conferencing, news agency PTI reported. Jaitley is currently recuperating from a kidney surgery and Goyal is in-charge of the finance ministry in his absence. In his GST launch speech last year, PM Modi had likened teething problems of the new tax system to 'adjusting to a new pair of spectacles'. A year later on Friday, Arun Jaitley in a blog post wrote, "Last year, the impact of the GST on direct tax collection was not visible. Since GST had been imposed in the middle of the year, it will be more apparent this year." In the post, Jaitley credited GST for having a 'significant impact' on the hike indirect tax collection too. "Those who have disclosed a business turnover for the GST now find it difficult not to disclose their net income for the purposes of income tax," Jaitley said. The Modi government has canvassed improvement in tax collection and compliance as one of its major successes on the economic front. Another area where the finance ministry could take pride is fiscal consolidation. The fiscal deficit under this government has largely remained under control despite not being able to meet the target in the last financial year (FY). The fiscal deficit is the difference between total revenue and total expenditure of the government. In the budget for FY 2018-19, Arun Jaitley set the fiscal deficit target for 2018-19 at 3.3 per cent of the gross domestic product (GDP) to accommodate higher demand for expenditure against the earlier target of 3 per cent. The government also revised the deficit target for the year ending in March 2018 to 3.5 per cent of GDP from the targeted 3.2 per cent. With the May fiscal deficit touching 55.3 per cent of the budget estimate (BE), the government would require a steady and healthy flow of revenues from GST to be able to meet the fiscal deficit target. Collection from GST had been choppy through a large part of the last year but has stabilised in the last few months on the back of anti-evasion measures like the rollout of the e-way bill. GST collection in May amounted to Rs 94,016 crore, down from April’s record Rs 1.03 lakh crore but well above the monthly average since the tax was rolled out last year. The government would thus, bet big on its year-old flagship tax reform to keep its coffers in a good shape to be able to carry out expenditures without fiscal pressure in the election year. The fact that revenue deficit had shot up to 2.6 per cent of GDP in FY 2017-18 from the budget estimate of 1.9 per cent, will make the government even more vigilant. GST was rolled out a year ago in a setting which many compared to Jawaharlal Nehru's famous 'tryst with destiny' speech on August 15, 1947. As the GST regime stabilises, India's biggest tax reform has the onus to keep the country's finances steady as we head to a general election. Sources:

Co-working spaces demand continues to rise, set to triple in 3 years

Co-working spaces demand continues to rise, set to triple in 3 years

June 29, 2018 in Investment News, Real Estate News, WeWork

The increasing demand for flexible and co-working spaces is prompting higher absorption of the commercial real estate. While co-working companies took up 1.8 million sq ft in 2017, the first quarter of 2018 itself has exceeded the annual tally of 2017. During the quarter, co-working players have picked up 2 million sq ft of office space with the highest transaction activity witnessed in Bengaluru, NCR and Hyderabad markets, which contributed 43%, 16% and 15%, respectively, showed data from Knight Frank. There are close to 200 co-working players running an estimated 400 shared workspaces across the country today, compared with just Regus and a few localised players in 2010 running less than 30 such centres. “Globally, the co-working space has seen a phenomenal growth between 2010 and 2018 and most of the growth has taken place in the last three years. Although the concept is relatively new in India, it has witnessed solid growth from nearly negligible existence couple of years ago to 2 million sq ft absorption in just a quarter,” said Samantak Das, chief economist & national director, Knight Frank India. Given the expansion plans of major players and the increasing appetite for this format from occupiers, Das believes property owners and co-working operators could well see annual transaction numbers treble from the current levels over the next 3 years. Co-working, or collaborative offices, a relatively new concept in India, involves various individuals, or start-ups, sharing a common workplace environment. It is steadily gaining momentum across prime Indian property markets due to relatively cheaper costs and the flexibility it affords. “It’s not a fad; it’s here to stay for a long term. In addition to start-ups and SMEs, large corporates are now also investing in employees and better work environment for them to boost productivity. We are seeing a shift in the way people want to work, and we will continue to invest to expand our capacities,” said Karan Virwani, Director, WeWork India. While Regus is the most established shared workspace operator in the country today with over 2 million sq ft and 20,000 seats under operation, WeWork and CoWrks are among the newest and aggressive players in this space. Regus is now taking note of the changing environment and adapting promptly. “We have been bullish and focus on growth in India. We want to double our network in 36 months to over 200 centres in tier-I and II cities. We are adapting our design template, product and services offering to suit the new millennial employees,” said Harsh Lambah, country head – India, IWG Plc, that owns Regus and Spaces brand in the country. WeWork and CoWrks started their India operations in 2016 and operate around 1.5 million sq ft and 1 million sq ft, respectively, with plans to more than double their footprint by 2019-end. Both these companies have acquired 0.7 million sq ft each of co-working space in Mumbai, Bengaluru and the NCR in the six months since October 2017. Despite the growing demand for co-working space, experts agree, there are several challenges that this segment is expected to face apart from changing the conventional mindset of occupiers. Data security and privacy are also impediments in the way of a corporate taking up co-working space, especially as the value of data becomes an ever greater source of competitive advantage. Corporate occupiers, therefore, tend to lean toward co-working space with contained floors, or spaces, within the facility to overcome this risk. The co-working business model is based on the operator’s ability to buy space long and selling it short. However, this is also a double-edged sword that makes it difficult to predict cash flows of such an enterprise. The average tenure of co-working space occupiers can vary from under six months to close to two years depending on the operator and the occupier profile. This makes, maintaining a deal pipeline, one of the most important parts of this business. Sources:

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