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IDBI Bank Real Estate Assets could Make or Break LIC Deal

IDBI Bank Real Estate Assets could Make or Break LIC Deal

June 27, 2018 in Investment News, Real Estate News

Life Insurance Corporation of India's (LIC's) bid to acquire IDBI Bank by is likely to have the bank's real estate assets make or break the deal. Sources told Money control that while LIC has expressed a desire to acquire real estate assets of IDBI Bank, it may not be willing to sell them. "Real estate assets will ideally need to be a part of the acquisition structure. We are in talks to work that out," said a senior LIC official. He added that this would one of the pre-conditions of the deal. LIC is in talks to acquire a majority stake in IDBI Bank. The proposal is being finalized and will be sent to the cabinet for approval in the next few days. Following which, the deal will be referred to Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDA) and Securities and Exchange Board of India (SEBI) for approval. In February 2018, market regulator SEBI bought IDBI Bank’s seven-storey office building in Bandra - Kurla Complex (BKC) for approximately Rs 1,000 crore. The 3.21 lakh square feet building was the second largest deal in BKC since 2013. The lender's total real estate assets including land holdings, residential and office buildings are collectively worth Rs 7,000 crore. IDBI Bank has more than six properties in prime locations across Mumbai. In August last year, the bank proposed plans to sell two residential properties and four commercial properties. The residential properties are in the well-known Rajesh Mansion and Mittal Castle plots in Mumbai's premium locations. The commercial properties on offer include the Minerva Theatre land plot, a unit in Corporate Park Chembur, an entire floor in Mafatlal Centre at Nariman Point and an office area in Mittal Court, Nariman Point. In FY18, the government-owned bank realised almost Rs 4,400 crore through the sale of its investments in non-core assets including the BKC property sale. Sourse: www.moneycontrol.com

Manesar Land Scam: Buyers Seek Clarity on SC Order

Manesar Land Scam: Buyers Seek Clarity on SC Order

June 25, 2018 in Investment News, Manesar Land Scam, Real Estate News

The ABW Manesar Allottee Welfare Society has filed a review petition, seeking clarification in the Supreme Court order dated March 12, 2018, on the Manesar land scam case, which reversed the decision to scrap the acquisition, and ruled that ownership of the land now rested with Haryana State Industrial and Infrastructure Development Corporation (HSIIDC). The review petition (number 022358/2018) was filed on Tuesday under Section 51 of the Civil Procedure, 1908, for clarification and modification of the order/judgement dated March 12, 2018. One of the petitioners, Naresh Jindal, said the court had directed that members of the applicant could either apply for possession from Huda/HSIIDC or seek a refund from the aforesaid authorities. However, there’s no clarity on the interest applicable or mention of a timeline. “If a refund is sought by us applicants, we should be entitled to interest on the refund amount. But the rate of such interest has not been provided in the SC order,” said Jindal. Similarly, the order does not provide a fixed timeline for HSIIDC to complete construction and hand-over possession. Homebuyers have further questioned whether buyers seeking refund should be eligible for 12% interest per year or not and that the court should fix a deadline for completion of construction. “We have requested the court to set a deadline for completion of construction, which is to be carried out by government authorities so that homebuyers do not have to wait another decade to get their homes,” said TS Rawat, another homebuyer. Out of the 400 acre land under the Manesar scam, a big chunk was brought by ABW developers to build their project ABW Aditya Niketan. More than 2,000 homebuyers have invested in this project, but construction hasn’t even started. Homebuyers have also highlighted that only recently, some private entities have got HSIIDC land registered in their names. “While the Court had appointed HSIIDC/Huda as custodian of the 400-acre land, there have been reports that parts of this land have been registered in private names, which is a concern,” said Mandeep Negi, another homebuyer. TOI had earlier reported that less than two months after the Supreme Court order in the Manesar land scam, a portion of the 400-acre land, whose ownership the SC had vested with HSIIDC, was sold off by private individuals through 20 different registries at the Manesar tehsil office. A tehsildar, a Nayab Tehsildar, a registry clerk and two computer operators were involved in the land deals, which were signed from March 14. Once it became public, even though the state government swiftly inquired into the matter and suspended the tehsildar and other junior employees, homebuyers are worried this could affect them. Meanwhile, HSIIDC has missed the two-month deadline to verify ownership claims of homebuyers who had bought properties in the land in question. SC said applicants had a month to file their claims on properties and the government body had to verify these within two months of judgement. However, almost three months later, the process is yet to be completed. The Manesar land deals happened in 2004 when the BS Hooda-led Congress government had withdrawn a notification for acquiring 688 acres, after initially issuing it. Meanwhile, the prospect of acquisition triggered distress sales among landowners, who were persuaded that selling out to private developers would fetch them a better price. By the time the state rescinded the notification, builders had managed to buy 400 acres for Rs 100 crore, where the market value was Rs 1,600 crore. Source: timesofindia.indiatimes.com

Warburg-Embassy JV Buys 110 acre in Haryana to Build Industrial Park

Warburg-Embassy JV Buys 110 acre in Haryana to Build Industrial Park

June 22, 2018 in Investment News, Real Estate News

Private equity major Warburg Pincus and Embassy Group’s joint venture company Embassy Industrial Parks has acquired a 110-acre land parcel in Haryana’s Farrukhnagar town near Gurgaon. The entity is looking to invest Rs 600 crore, including the land cost, to develop a 3-million Sq-ft industrial park on this plot. The industrial and warehousing solutions company has already leased out 1 million sq ft of this proposed development. In 2015, Warburg Pincus and Embassy Group had together infused $250 million equity capital to build industrial and warehousing spaces across India. By the end of this year, the company will have 1million sq ft fully operational and 3 million sq ft of partly ready, under-construction, but leased space. “Substantial part of this equity capital has already been deployed and we are open to investing more for right opportunities. By 2019-end, we will have 6-7 parks operational and by the end of 2020, we’ll increase this number to 9-10 operational parks,” Anshul Singhal, CEO, Embassy Industrial Parks, told ET. The Farrukhnagar industrial park is part of Embassy Industrial Parks’ Rs 1,910-crore Memorandum of Understanding (MoU) with the government of Haryana. As part of this pact, the company has developed a 6 lakh sq ft industrial park in Bilaspur and that was also sold out before its completion. This has resulted in Embassy leasing out total 1.6 million sq ft within 24 months since signing the Haryana government MOU. This is a significant component of the 3.6 million sq ft available at these two next-generation industrial parks. Sources: realty.economictimes.indiatimes.com

IKEA Looks to Buy Additional 20 Acres Land Parcel in Gurugram

IKEA Looks to Buy Additional 20 Acres Land Parcel in Gurugram

June 20, 2018 in Gurgaon Investment, IKEA, Investment News, Real Estate News

Global furniture giant IKEA is believed to have sought additional land from Huda for the store it plans to open in the city. Sources in Huda said Ikea is interested in a plot of 20.46 acres, more than double the size of the plot that the company had earlier bought. Last year, IKEA, the multinational company founded in Sweden, purchased 9.83 acres in Sector 47 for Rs 842 crore through an e-auction, making it the biggest deal to be struck by Huda. Now, according to Huda officials, it is seeking the land adjacent to this plot. This time, too, Huda is likely to conduct an e-auction for the plot. A meeting attended by Ikea representatives, town and country planning principal secretary AK Singh and Huda officials was held in Chandigarh on Thursday. Though officials were tight-lipped about the details of the meeting, Singh told TOI, “We have asked the company (Ikea) to give their requirements in writing, and we will take it from there”. The 9.83-acre plot was put up for e-auction three times but had no takers until October 2017 when Ikea finally participated and bought it. Huda officials said the 20.46-acre plot would cost upwards of Rs 1,500 crore. “The purpose is to earn revenue for Huda and the land will be allotted to the highest bidder,” said Huda administrator Chandrashekhar Khare. Ikea will make its foray into India next month by launching its first store in Hyderabad, Reuters reported on Thursday. The store is Hyderabad will sprawl over 400,000 square feet. After launching in Hyderabad, Ikea will move to Mumbai in 2019, followed by Bengaluru and Delhi NCR. The company is also looking to expand to five other markets — Surat, Ahmedabad, Kolkata, Chennai and Pune. Sources: realty.economictimes.indiatimes.com

DLF Sells Office Space In Gurugram

DLF Sells Office Space In Gurugram

June 18, 2018 in DLF News, Investment News

India's largest realty firm DLF has sold nearly 50,000 sq ft of prime office space in Gurugram for about Rs 150 crore on account of rising demand for commercial properties from corporates and institutional investors. DLF, which generally provides office space on lease to corporates, has adopted both lease/sale model for its 12 lakh sq ft office building 'Two Horizon Center' on Golf Course road, Gurugram in Haryana. According to sources, the company has sold about 48,000 sq ft of office space in this project at a basic selling price of more than Rs 25,000 per sq ft to a big corporate house. Now, the company is left with only a little over 1 lakh sq ft in this project, they added. The company spokesperson declined to comment on this transaction. The project 'Two Horizon Center' houses Samsung, Harvard Business Review, KIA Motors and Hero Cycles among others. In 2016, DLF had leased about 3.5 lakh sq ft of office space to Samsung India Electronics in this project. Two Horizon Center is part of the 12-acre Horizon Center complex that also houses the fully-leased One Horizon Center project, which was developed jointly by DLF and US-based Hines. Horizon Center commands a monthly rental of about Rs 150 per sq ft. Unlike sluggish housing sector, office segment has been performing extremely well and witnessed several big-ticket deals in the last few years. DLF promoters recently sold 40 per cent of their stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for about Rs 12,000 crore. The deal included the sale of 33.34 per cent stake to Singapore's sovereign wealth fund GIC for Rs 9,000 crore. The promoters monetised stake in DCCDL to infuse funds in DLF for reduction of debt. While declaring its annual result last week, DLF said that the commercial segment of the business continued to exhibit good growth. Gross leasing achieved during the year stood at 6.76 million sq ft, out of which 5.96 million sq ft was attributable to DCCDL. Apart from DLF, other players are also monetising their commercial assets. In April, Essar group sold prime commercial property Equinox Business Parks at Bandra-Kurla Complex (BKC) in Mumbai to global investment firm Brookfield for Rs 2,400 crore. Godrej Properties had in September 2015 sold 4.35 lakh sq ft office space to Abbott for Rs 1,480 core. Shriram Properties last year sold its IT-SEZ to Xander in Bengaluru. Prestige group is also in talks with GIC to sell the stake in its office portfolio. The co-working operators are also taking large office space on lease from real estate developers as demand for shared office space is gaining momentum. Sources: realty.economictimes.indiatimes.com

Over 800 Oustees Of Gurugram’s Global City Project Get Alternative Plot Allotment Letters

Over 800 Oustees Of Gurugram’s Global City Project Get Alternative Plot Allotment Letters

June 16, 2018 in Gurgaon Investment, Real Estate News

Around 870 landowners, whose plots had been acquired for the long-stuck Global City project, were issued letters qualifying them for allotment of alternative residential plots under the resettlement and rehabilitation (R&R) policy. The letters, dated June 8, were handed over to the landowners of Gadoli Khurd, Harsaru, Mohammad Pur, Khandsa and Narsinghpur villages on Monday. Excluding the 870 plot owners who got the approval, over 30 plot owners were informed about their ineligibility under the R&R policy. “As of now, we have identified who is eligible and who is not eligible for the alternate plots. Further, we have given them a month’s time to file their objections, if any, with regard to the eligibility quantum of land,” said a senior Haryana State Industry and Infrastructure Corporation (HSIIDC) official. According to the HSIIDC officials, for a landowner to be eligible for an alternative plot, at least 75% of his/her land should be acquired by the government. However, officials said that the location of the alternative plots is yet to be identified. TOI had earlier reported that HSIIDC had written to the deputy commissioner asking him to intervene and expedite the matter which is pending with the district revenue officer. HSIIDC had received a total of 907 applications under the R&R policy, of which 897 applications were sent to district revenue officer in May 2017. “Landowners will have to pay 10% of the allotment fee for the plots under the policy,” said the official. In 2003, 1,385 acres of land was acquired and the landowners were awarded a compensation of Rs 20 lakh/acre. It was eventually revised to Rs1.4 crore/acre by the Supreme Court. However, the government never allotted the alternate plots to the land-owners which led to several protests. The project was first launched by the Hooda government. Sources: realty.economictimes.indiatimes.com

Conveyance Deed? You Should Know About This.

Conveyance Deed? You Should Know About This.

June 13, 2018 in Defination, Investment, Real Estate News

‘Conveyance’ refers to the act of transferring the title, ownership, rights and interests in a property, from one entity to another. The term ‘deed’ refers to an instrument, like a written document that is signed by all the parties to a contract, in this case, the seller and buyer. It is a binding contract that is enforceable in a court of law. A conveyance deed is, therefore, a contract in which, the seller transfers all rights to legally own and keep a property. The purchase of a property is not complete without a valid conveyance deed. The terms conveyance deed and sale deed are often used interchangeably and while they refer to the same contract, there is a subtle difference between the two. All sales deeds are conveyance deeds but conveyance deeds can also include gift, exchange, mortgage and lease deeds. It is important to note the difference between an agreement for sale and a sale/conveyance deed. An agreement for sale contains a promise to transfer a property in question in future, on the satisfaction of certain terms and conditions. An agreement for sale does not, in itself, create any interest in or charge on a property. Therefore, the sale of a property is not complete without a conveyance deed.

Important points to consider, to ensure smooth purchase/sale of a property

  1. The seller is required to certify that the property is free of any legal encumbrance.
  2. If a loan was taken against the property in question, then, the mortgage must be cleared before the deed is signed. Buyers have the option of having this checked at the local sub-registrar’s office.
  3. The conveyance deed should state the exact date on which the property will be handed over to the buyer.
  4. Within four months of the execution of the deed, all the original documents related to the sale of the property, need to be produced for registration before the local registrar.
  5. The deed is required to be signed by at least two witnesses.

A valid conveyance deed must contain the following:

  1. The actual demarcation of the property.
  2. Other rights annexed to the property and its use.
  3. The full chain of titles, that is all legal rights up until the present seller.
  4. The method of delivery of the property to the buyer.
  5. A memo of the consideration, stating how it has been received.
  6. Any further applicable terms and conditions for the full transfer of ownership rights.
  7. The seller is required to certify that the property is free of any legal encumbrance.
  8. If a loan was taken against the property in question, then, the mortgage must be cleared before the deed is signed. Buyers have the option of having this checked at the local sub-registrar’s office.
  9. The conveyance deed should state the exact date on which the property will be handed over to the buyer.
  10. Within four months of the execution of the deed, all the original documents related to the sale of the property, need to be produced for registration before the local registrar.
Sources: housing.com

Goldman, Warburg eye $200 million stake in WeWork India

Goldman, Warburg eye $200 million stake in WeWork India

June 11, 2018 in NRI News, Real Estate News

The Indian arm of co-working space giant WeWork, controlled by billionaire developer Jitu Virwani of Embassy Group, is talking to Goldman Sachs and Warburg Pincus, among others, to raise up to $200 million. With this, the local unit’s valuation is testing $1 billion, or the Unicorn tag, people directly aware of the matter said. Virwani and Embassy have the exclusive rights to operate WeWork in India under a deal signed about two years ago. Since then, the collaborative workspace pioneer has made rapid strides in the country where it operates 12,000 desks currently, with plans to more than double it by the end of the year. India is the only big market where the New York-headquartered WeWork — last valued at $20 billion globally — has struck an exclusive franchise deal to run its operations. The embassy has mandated JM Financial on the potential fund-raising at an enterprise valuation in the range of $700 million to $1 billion for WeWork India, sources cited earlier said. GIC of Singapore is another contender that has shown interest in the deal-making, which is still in the early stages. The valuation would be range-bound, depending on how the local unit scales up the business in the course of the year. The figure could be around $1 billion if the business remains on track and the target of doubling desks in the year is achieved. The latest development comes at a time when WeWork, which raised more than $4 billion from SoftBank, has been eyeing to raise its economic interest in the Indian business. It has an option to buy back the business in the fifth year of operations, but there has been swirling speculation about WeWork and SoftBank looking to take charge of the Indian business much earlier. Embassy and JM Financial declined to comment. An emailed query to WeWork remained unanswered at the time of going to press. The demand for co-working and flexible workspaces has soared in India with international property consultancy firm JLL estimating that more than 13 million would be using it by the year 2020. Interestingly, big enterprises are driving the co-working space absorption with corporations like IBM and HSBC showing interest to take up collaborative floors. The rise of millennials and the large, vibrant startup ecosystem are the other key factors boosting co-working. In India, the demand for flexible working spaces is expected to increase 40% and the stock supply is seen rising 35% in the current calendar year, a JLL report said, adding that it would account for nearly 20% of the total office absorption in the country. Tracking the boom, the number of flexible workspace providers have also risen significantly, though WeWork and its main Indian rival CoWorks remain the top players. WeWork operates nearly 1-million-sqft space at present and has a million sqft more signed up already. Adam Neumann and Miguel McKelvey co-founded WeWork eight years ago, one of the heavily funded tech-enabled startups, managing more than 10 million sqft of shared office spaces worldwide. Virwani controls the privately held Embassy Group, one of the largest conventional office space developers in the country, while his son elder Karan Virwani leads WeWork operations locally. Sources: realty.economictimes.indiatimes.com

Embassy Group To Launch REIT This Year To Raise Fund

Embassy Group To Launch REIT This Year To Raise Fund

June 9, 2018 in Investment News, NRI News, Real Estate News

Realty firm Embassy group plans to launch its real estate investment trust (REIT) this year to raise about USD 1 billion as part of its strategy to monetise rent-yielding commercial assets, sources said. Global investment firm Blackstone-backed Embassy Office Parks is likely to file the draft prospectus with market regulator Sebi by next month to launch the country's first REIT, they added. Its REIT is already registered with Sebi. The Bengaluru-based Embassy group has over 30 million sq ft of leased office space and has a pipeline of about 22 million sq ft across major cities. According to sources, the Embassy group is in the process of finalising the total office assets that would form part of REIT platform. The size of the REIT would be about USD 1 billion and the amount raised would be utilised to retire debt, they added. Embassy group spokesperson declined to comment. Sebi had notified REITs and InvITs Regulations in 2014, allowing setting up and listing of such trusts which are very popular in some advanced markets. However, only two InvITs - IRB InvIT Fund and India grid Trust - have got listed on stock exchanges so far and not a single REIT has been listed in the country. Unlike housing sector which is facing a multi-year slowdown, the commercial real estate, particularly office project, is doing well and attracting a lot of investments from global and domestic investors. India's largest realty firm DLF's promoters sold 40 per cent of their stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 12,000 crore. This deal included sales of 33.34 per cent stake to Singapore's sovereign wealth fund GIC for Rs 9,000 crore. DLF has 66.66 per cent stake in the DCCDL. GIC is also buying the stake in the commercial portfolio of Bengaluru-based Prestige group. Many companies are monetising their office assets through outright sale. Essar group in April this year sold prime commercial property Equinox Business Parks at Bandra-Kurla Complex in Mumbai to global investment firm Brookfield for Rs 2,400 crore. Embassy group is one of the leading real estate developers in the country. It has developed over 45 million sq ft of prime residential and commercial projects. The company, in a joint venture with Blackstone, has developed business parks covering about 34 million sq ft of office space. Embassy group is also into hospitality and industrial parks business. It has recently entered into co-working space. The group has an operating agreement with US-based WeWork to launch this brand in India. Sources: realty.economictimes.indiatimes.com

Government Sets Up ‘Advisory Committees’ To Solve Real Estate Problems

Government Sets Up ‘Advisory Committees’ To Solve Real Estate Problems

June 7, 2018 in Real Estate News, RERA Update

Hardeep Singh Puri, Union Minister of State (Independent Charge) in the Ministry of Housing and Urban Affairs on Friday said that the government has set up 'Advisory Committees' in the western, eastern and southern region to solve existing problems of real estate. The minister was speaking at Global Investment Summit 2018 in Gurugram. The committees will consult with builders, home buyers and seek a solution of problems confronting these so that deliveries of affordable houses are not further delayed and builders are also able to sort out their bureaucratic problems. The committees will begin their assigned work in the month of June 2018. Rajeev Talwar, chairman NAREDCO urged the government to come out to the rescue of those builders and real estate developers whose land parcels have been mortgaged by various states in pretext or other as it would delay the project’s completion and halt real estate development in the country. The minister blamed a few handful of real estate builders that have brought a bad name to this sector informing industry that required action would be taken against them as per provisions of the law of land but assured that the Union government in consultation with the state of UP and Haryana, it would be able to sort out and adequately address problems of NCR builders and home buyers. The housing minister was also of the view that RERA related issues with builders would also be addressed by the members of the Advisory Committee.

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