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India Set To See Rs 45,000 Crore Investments In Warehousing By 2020 Report

India Set To See Rs 45,000 Crore Investments In Warehousing By 2020 Report

March 31, 2018 in Investment News

India is set to witness investments close to Rs 50,000 crore for in the creation of warehousing facilities across the country between 2018 and 2020. Different categories of warehousing are expected to create around 20,000 jobs to during these three years at different levels of specification and specialization, showed a JLL India report. This investment comes on the back of the fact that nearly Rs 10,000 crore was invested in 2017. Two prominent changes that have created significant growth prospects in warehousing are the implementation of GST in India and creating a unified taxation, and the rapid growth of e-commerce necessitating the building of large-scale warehousing across various locations Peripheral locations of tier 1 and tier 2 cities are expected to be the prime beneficiaries of the new wave of growth in warehousing. Of all the categories, warehousing will be witnessing the highest investment of over Rs 35,000 crore in the next 3 years, mostly in creating storage facilities for retail and consumer goods, while cold storage and agricultural warehousing will see about Rs 7,500 crore investments. Container storage would be attracting around Rs 500 crore during the same period. The overall growth in e-commerce and a shortening turnaround time for delivery has necessitated a sharp growth in warehousing in the country. Apart from E-Commerce, the next big sector of spaces will be the electronic and white goods that command significant warehousing spaces in urban and semi-urban locations. These are also sectors that, despite their incremental requirements in warehousing, are averse to owning the requisite place, therefore mostly reliant on third-party warehousing facilities. It is estimated that rade A and B warehousing stock will grow at a CAGR of 21% year-on-year taking the total tally of warehouse space in India to 247 million sq ft by the end of 2020 almost doubling the current warehousing stock of 139.8 million sq ft in 2017. Warehouse and logistics are one of the biggest growth areas that have emerged in recent times. We have seen Rs 125,000 crore invested through private equity in warehousing space since 2014. While it made up approximately 10% of total PE investment in 2017, the share is expected to grow to claim a larger share of investment. India’s logistics and warehousing sector are rapidly transitioning through a revolutionary phase,” said Ramesh Nair, CEO and Country Head, JLL India. According to him, there have been multiple initiatives associated with large investments both domestic and international within this segment, underscoring the upcoming trend. With India’s logistics industry recently rewarded with infrastructure status, thereby providing the impetus for added interest and therefore investments. Based on JLL, India Analysis of 6 Hours Distribution Potential and Composite Logistics Score Index estimating the potential of various locations as strong warehousing nodes in the future, aside of the metropolitan and tier 1 locations Surat, Kanpur, Lucknow, Ranchi, Madurai, Coimbatore, Ludhiana, Ambala, Tiruchirapalli, Nasik, Madurai and Jaipur have emerged as the the top favorable for the major warehousing spoke locations in the country. Amongst the Tier 2 cities, these cities have shown strong growth characteristics that will allow them to emerge as warehousing hubs in a hub and spoke model, the report said. These cities are strategically located to be in proximity to other major markets and allow transportation to happen to their feeder locations in less than 6 hours. Further, these cities provide favourable policies for setting up of businesses and have high manufacturing potential. Sources: TheEconomicsTimes

Real estate may comes under GST from April

Real estate may comes under GST from April

March 28, 2018 in GST, Real Estate News

To enhance transparency in property transactions, the GST Council is expected to bring the real estate sector under the purview of the unified indirect tax regime GST from 1 April next, an expert has said. "It could be introduced from 1st April, and the legislative changes could be done in this (budget) session to facilitate this," CBEC (Central Board of Excise and Customs) ex-Member VS Krishnan told business news channel BTVI in an interview. Krishnan said the sector can be brought under the GST as a deemed service. "Land may not be a service, but what you have is right to use the land for residential construction... therefore, it can be treated as a service," Krishnan told BTVI. "What's going to happen is that the whole transaction is going to become transparent... which means what has happened after demonetisation, that process is likely to go forward... in a sense that organised players will welcome." Krishnan further said that the GST rate imposed on the sector may not be very high "because real estate is linked to affordable housing". "The government may think of 12 percent. But 12 percent may have a backlog with the accumulation of credit... because GST paid on land would also be set off, the GST paid on cement and steel would be set off, and the GST paid in the earlier process of construction services will be set off," Krishnan elaborated. "So, it may be revenue-neutral in the GST side, but it will clean up the land market, and probably also encourage foreign investors to invest in the real estate sector." According to sources, the proposal to include the real estate sector under the purview of the unified indirect tax regime is expected to be discussed at the council's meeting to be held in New Delhi on Thursday. Sources: Firstpost.com

Supreme Court asks Jaiprakash Associates Ltd to deposit Rs 200 crore

Supreme Court asks Jaiprakash Associates Ltd to deposit Rs 200 crore

March 26, 2018 in Jaiprakash Associates, Real Estate News

The Supreme Court on Wednesday asked the embattled realty firm Jaiprakash Associates Limited (JAL) to deposit Rs 200 crore in two instalments by May 10. The bench headed by Chief Justice Dipak Misra asked the real-estate major to deposit Rs 100 crore by April 6 and the rest by May 10. The bench, comprising justices A M Khanwilkar and D Y Chandrachud, also asked the firm not to send any notices for default in the payment of EMIs to home buyers who have opted for the refund. The top court asked JAL to submit a project-wise chart of home buyers seeking refund so that the amount can be dispersed on pro-rata basis. "At present we are concerned with the refund and will take later the issue raised by home buyers who want delivery of flats," the top court said. Meanwhile, JAL informed the apex court that only eight percent of 31,000 home buyers have opted for the refund and the rest want possession of flats. The firm also told the court that it has received/sought occupation certificate with regard to 13,500 flats so far in 2017-18. The firm had on January 25 deposited Rs 125 crore in the Supreme Court after being directed to do so to safeguard the interests of home buyers. The top court had on January 10 directed JAL, the holding firm of Jaypee Infratech Ltd (JIL), to provide details of its housing projects in the country, saying home buyers should either get their houses or their money back. It had refused to accord urgent hearing on a plea of the Reserve Bank of India seeking its nod to initiate insolvency proceedings before the National Company Law Tribunal (NCLT) against JAL, saying it would be dealt with at a later stage. Sources: Times of India

Godrej Properties Announced Three New Projects Including NCR

Godrej Properties Announced Three New Projects Including NCR

March 24, 2018 in Godrej News, GPL News, Investment News, Real Estate News

Godrej Properties Ltd.,

One of India’s leading real estate developers announced the addition of three new projects, two in Bangalore and one in Noida. GPL has entered into a joint venture with Sai Srushti Group to develop a 100 acres land parcel on NH-648 near Devanahalli Town in North Bangalore. NH-648 is a major highway connecting all primary markets of Bangalore from West to South. This shall be Godrej Properties’ first plotted development project and it plans to develop approximately 2 lakh square meters (2.15 million sq. ft.) in the project. North Bangalore has emerged as one of the fastest growing markets of Bangalore with multiple infrastructures and real estate projects coming up in the area. The site is in close proximity to Bangalore International Airport and the planned Aerospace SEZ and IT & Hardware Park, Devanahalli.  It offers good connectivity to the key commercial and industrial catchment areas of the New Airport Road and Outer Ring Road. This will be GPL’s sixteenth project in Bangalore. The second project, also in Bangalore, is a joint venture with the promoters of Lahari Music Group, south India’s biggest music group, to develop 17 acres of land, with the possibility of further extending the development up to 24 acres, in Electronic City Phase – I, abutting the main Wipro Campus in South Bangalore. Godrej Properties plans to develop a modern residential housing project of approximately 1.3 lakh square meters (1.4 million sq. ft.) with an option to further increase it to 2 million sq. ft. The third project is in the Noida Expressway micro market. GPL will develop a Group Housing Project under the Development Management model in partnership with the Ace Group. This project will offer approximately 1.6 lakh square meters (approximately 1.7 million sq. ft.) of saleable area and will be developed as a modern group housing development. This project is located in one of the most promising locations in Noida with easy access from the Noida Expressway and Noida metro. This is GPL’s 3rd project in Noida and 11th project within the National Capital Region (NCR).  Within seven years of entering the NCR market, GPL has established itself as one of the market leaders in Gurgaon and hopes to replicate this success in other parts of NCR. Mr Pirojsha Godrej, Executive Chairman, Godrej Properties said, “We are happy to add these new projects in Bangalore and NCR. This fits well with our strategy of building our presence in the country’s leading real estate markets. We look forward to delivering outstanding projects across these locations.” Source: realtyfact.com

Trump Organization’s Real Estate Partner In India Accused of Fraud

Trump Organization’s Real Estate Partner In India Accused of Fraud

March 22, 2018 in Real Estate News, Trump Organisation Real Estate

Investors have alleged that the Indian real estate partners of the US President’s The Trump Organisation have committed a fraud they estimated at between $150 million and $200 million. The investors, who first made the charges earlier this month, said the partners in Donald Trump’s business, including Lalit Goyal, Anurag Bhargava and others, had illegally siphoned off their money. “Indian [real estate firm] IREO ran a real estate scam that cheated investors of nearly $150 million,” said a complaint by the investors. IREO former CEO Ramesh Sanka witnessed cheating, fraud and misappropriation of money in the company where he had been employed, all of which resulted in wrongful gain for IREO managing director Lalit Goyal and his associates. In 2016, two real estate deals were signed for construction of an office tower in Gurgaon, outside New Delhi — one for 78 acres in the small town of Bhiwadi, and another for 37 acres in Gurgaon. Sanka quit the firm that year as he had been “increasingly uncomfortable with the way in which IREO’s business was being conducted” — a complaint to the Delhi police said. International investors, the UK-based Children’s Investment Fund Foundation and US-based Axon partners, filed the complaints. Since 2016, the US President’s son, Donald Trump Jr, had expressed enthusiasm about working with IREO. As per its franchise licensing agreement, the Indian business partners would build the property for Trump Organization. Axon and Children’s Investment Fund Foundation said in their complaint: “The Bhiwadi deal was a sham planned by Lalit Goyal in conspiracy with various other accused to misappropriate about $62 million.” This March another letter from Axon states that “they have evidence of diversion of funds” to the tune of nearly $150 million. The Trump Organization, IREO, Axon and Children’s Investment Fund could not be reached for comment. Sources : timesofindia

Godrej Fund Management enters into the commercial real estate private equity space

Godrej Fund Management enters into the commercial real estate private equity space

March 19, 2018 in Godrej News, Investment News, Real Estate News

Godrej Fund Management,

The real estate private equity arm of the Godrej Group has announced the first close of its US $450 million office development fund and a US $150 million office investment fund. Jointly the funds can invest/develop office assets worth over the US $1 billion in value, a company statement said. With this development, the assets under management for GFM, which is also managing two existing residential investment funds, has crossed the US $1 billion marks within one year of it being spun out as a separate business. The two new funds that have been raised are: Godrej Build to Core – I (“GBTC-I”), a US $450 million ‘club style’ office investment platform that will invest in developing world-class, Grade-A office buildings in leading locations across the key office markets of India. APG Asset Management N.V, which has invested in previous funds managed by GFM, will be the cornerstone investor for GBTC-I. The other newly raised fund is Godrej Office Fund- I (GOF-I), a US $150 million discretionary blind pool fund that will invest in core and core-plus office and commercial properties across India. “We are pleased to enter the commercial real estate private equity space.  We believe there is a lot of opportunity for our fund management company in both residential and commercial real estate in India and we are happy to see the business quickly reach the $1 billion AUM milestone.  We look forward to building a strong track record of excellence to ensure we remain a preferred partner to the institutional capital looking to participate in the growth of the Indian real estate sector,” says Pirojsha Godrej, Chairman, Godrej Investment Advisers. “We are very pleased with our diversification into the office asset space through successful first closes of both our office funds. We are also delighted to continue our relationship with APG who has been a strong supporter of our funds' management business since inception. The blend of investment management capabilities and strategic access to best-in-class development capabilities provides GFM with a competitive advantage and positions it well to deliver the targeted risk-adjusted returns,” says Karan Bolaria, Managing Director & CEO, Godrej Investment Advisers. Sources: moneycontrol.com

NRIs should keep in mind these points while investing in Indian Property

NRIs should keep in mind these points while investing in Indian Property

March 17, 2018 in Investment News, NRI News, Real Estate News

NRIs can legally invest in Indian real estate. But they have to keep in mind fo0llowing points while investing. NRIs with a valid Indian passport can invest in the Indian realty market, though there are a few restrictions. NRIs with a valid Indian passport need no prior approval unless they are citizens of some neighboring countries like Pakistan, Bangladesh, Sri Lanka, Iran, Nepal, Bhutan, Afghanistan or China. They can buy as many properties (residential or commercial) as they want but are not allowed to buy agricultural land, plantation properties, and farmhouses unless such properties are gifted to or inherited by them. Transactions must be done in Indian rupees through regular banking channels via an existing NRI account. Just like Indian citizens, NRIs can also avail of home loans to purchase a property, with the maximum loan amount generally being 80% of the property value. Finally, the RBI doesn’t impose any rule for immovable property which is inherited or gifted. NRIs can lease or rent such properties without any restrictions. Be sure to hire a reputed lawyer to vet all property documents. It is important to verify the original title deed documents and ensure that the property title is in the name of the seller. Do a thorough check to ensure the seller has cleared all the dues related to the property. Verify that the seller has not diluted the right to transfer the property to a buyer, and cross-check if the property is built on agricultural land without requisite government permissions as an NRI may get into legal problems in such transactions. In the case of under-construction properties, an NRI has to give a power of attorney to the developer or a trusted associate. Check this For the Best Commercial Project in Gurgaon. Sources: Economic Times

In Asia Pacific Region Delhi’s Connaught Place is the third most expensive Office Market

In Asia Pacific Region Delhi’s Connaught Place is the third most expensive Office Market

March 15, 2018 in Investment News, Real Estate News

Business districts across New Delhi, Mumbai and Bangalore have dwarfed many matured international markets in rental growth and in terms of overall gross effective rents, showed the Knight Frank Asia-Pacific Prime Office Rental Index Q4 2017. Commanding gross effective rentals of $88.8 per sq. meter per month, Connaught Place in Delhi has emerged as the 3rd most expensive office district among global peers across 20 international cities. The index was topped by Central, the prime office pocket in Hong Kong with rentals of $212 per sq. meter per month. Mumbai’s Bandra-Kurla Complex (BKC), the 5th most costly office conclave on the list with gross effective rentals of $80.1 sq. meter per month improved its position by two placed over Q4 2016. In terms of rental appreciation, Bangalore’s Central Business District (CBD) recorded the 3rd highest growth with the annual increase of 5.4% in the 12 months to Q4 2017. While Connaught Place with 5% growth ranked 5th by this measure, BKC with 4% appreciation stood at the 10th position. “Rental growth continues to be strong across prime office markets in India on account of an ongoing supply crunch in the country. This, coupled with strong occupier demand is expected to drive the rentals up in the next 12 months in the prime office markets of Mumbai and Bengaluru; however, we expect rental growth to remain stable in Connaught Place,” said Samantak Das, Chief Economist and National Director-Research, Knight Frank India. Overall the index recorded 1.1% on-year growth in the last quarter of 2017 propelled by solid economic performances across the Asia Pacific region. This was primarily driven by rising rents in 12 of the markets over the quarter. Further rentals across at least 16 out of the 20 markets tracked are either set to appreciate or stay stable, the report added. Demand for co-working and technology-related spaces are expected a play a major part in pushing rents up. Source: Realty- Economics Times

Issues certificate to check duplication and tampering – Haryana RERA

Issues certificate to check duplication and tampering – Haryana RERA

March 13, 2018 in Real Estate News, RERA Update

The Gurugram bench of Haryana Real Estate Regulatory Authority (H-Rera) is issuing a new certificate to developers and real estate agents who register with the authority, to make the registration of property foolproof. The certificate will be valid for five years, after which the property owner will have to get it renewed online. “H-Rera rules will be engraved on the left-hand side of the certificate,” said H-Rera chairman K K Khandelwal, adding that the objective of this new certificate is to avoid duplication and tampering. Officials added a standard format has been prepared for owners to get their properties registered, which has also been uploaded on the authority’s website. Real estate agents and developers will have to fill up the details and attach copies of the required documents. Khandelwal said the rules for real estate agents will be clearly mentioned in the certificate. Mentioning a few, he said, “Real estate agents will not facilitate the sale or purchase of any plot, apartment or building, as the case may be, in a real estate project or part of it, being sold by the promoter, which is not registered with the Authority.” “They will have to maintain records of all their deals which must be presented to the Authority for audit from time to time,” the chairman added. A fixed amount has been prescribed as a fee, which is to be submitted in the form of cheque/demand draft with the registration form. One can register as an individual or as a company. The fee for an individual has been fixed at Rs 25,000 per property, while the same for a company is Rs 2,50,000 per property. Elaborating the details and documents required for registration, H-Rera officials said, “Property owners need to primarily provide their contact details, PAN number, address proof, along with their photographs. Particulars of registration as proprietorship firms, societies, partnership, company etc., are to be provided, including their by-laws, memorandum of association, articles of association etc., as the case may be. They are also supposed to provide details of registration in any other state or union territory if any. After scrutiny of the application, if any information is found missing, the applicant would be alerted within a week. After which the application would move forward and a final decision about the registration will be taken within 30 days.   Sources : Realty -Economic times

In India, REITs can open entryways of opportunities for developers and investors

In India, REITs can open entryways of opportunities for developers and investors

March 10, 2018 in Real Estate News, REIT

The landscape of real estate in India has been evolving rapidly over the last decade and a half. Earlier, office buildings in India used to be primarily with small floor plates and single buildings without many amenities. These buildings were strata sold to investors/occupiers. These investors then rented out space to clients. Quality of the buildings in those days was not great and maintenance was a big issue as there were multiple landlords. Since the IT boom of the early 2000’s many global multinationals have started coming to India or have signed up for captive process centers in India. These companies majorly started creating a demand for high-quality office spaces with large floor plates and high specifications. Since they had large size requirements, running into many thousands or sometimes lacs of square feet, they needed a single landlord to deal with. With this high demand, developers in India started developing world-class office spaces and campuses for occupancy by large clients in the IT, BFSI and other sectors. These buildings are highly capital intensive and the only way to cash out from this asset class was to either sell it out in full to a large institutional investor or raise debt capital via the rental discounting route. Lack of capital in this scenario led to developers either exiting existing buildings to create new ones or had to increase their leverage. REITs have given the developers an opportunity to retain these assets and partly cash out from them to help them create new Grade A office space. REITs will also give the opportunity to small retail investors to participate in the growth of this asset class. With REITs coming in the office space business in India will be more institutionalized, as REITs will be well audited as well as developers will have to maintain these assets, so it retains its valuation. Today many large institutions, such as Blackstone, GIC, Brookfield have created multi-million square feet portfolios with large developers. These portfolios will be listed on REITs for the benefit of partly cashing out and creating new assets. The investment from these institutions has also benefited large developers such as Embassy in Bangalore, KRC in Mumbai, DLF in NCR to partly cash out today for the growth of their larger portfolio. REITs will also benefit other assets which are rent-yielding. The other asset class gaining traction in this space is retail mall assets. Malls are also high capital-intensive businesses which will benefit from REITs in a similar fashion. Due to high capital being invested in malls by developers they are unable to create further assets. REITs will bring in that liquidity in the mall sector as well. The newest asset class that is under development today is the industrial and warehousing asset class. Until sometime back industrial and warehousing asset class was not organized and if a company wanted to lease space in this asset class it had to deal with local landlords and make do with poor infrastructure and asset quality. Today, there are developers looking at creating industrial hubs with large layouts. Many companies now want to lease their factories and not invest in land and building, but focus on operations. This asset class is seeing a lot of interest especially after the ‘Make in India’ initiative. Post GST, the warehousing asset class has also received a large interest from developers and investors. This asset class is bound to create good rental revenue streams for developers. REITs will only help developers partly liquidate this asset class and create a larger portfolio. There is a large potential for REITs in the industrial and warehousing assets since this asset class is still in its growth stage. REITs in India is a welcome move. It will only help the income-yielding asset class to get organized and institutionalized. It will also help developers deliver their positions and bring equity into the system. Retail investors will also get a pie of these assets, as they will be able to invest in such asset classes. There is potential for REITs in many other real estate asset classes, such as schools, hospitals, but these are not still well-organized assets with large sizes. Also, the ownership of these assets today is segregated with multiple landlords in small pieces. Though there is a potential, these asset classes will need consolidation before they can be REITed. We should soon see the REIT listing happening for some of the office assets and will get a warm welcome from the India capital markets and we should see a large scale subscription for units. Source: Money Control

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