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Aishwarya Raj Singh

Aishwarya Raj Singh
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72-acre logistics park to be developed by Lodha, Morgan Stanley Real Estate at Palava near Mumbai

By
Aishwarya Raj Singh
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Realty developer Lodha NSE 4.70 %, listed as Macrotech Developers, and Morgan Stanley Real Estate Investing (MSREI) have entered into an agreement to develop a logistics park spread over 72 acres at Palava Industrial and Logistics Park (PILP) near Mumbai.

72-acre logistics park to be developed by Lodha, Morgan Stanley Real Estate at Palava near Mumbai

The development of the logistics park with around 1.9 million sq ft Grade A warehousing space is expected to entail an investment of around Rs 600 cr for development. As per the agreement, Lodha would further act as the development manager for the project, responsible for leasing, project development, and asset management.

Shaishav Dharia, CEO, Townships, and Rental Assets, Lodha said, “Our marquee acquisitions and key partnerships for PILP have helped us establish a solid track record in the logistics sector. Through this formidable collaboration, we will leverage our development expertise along with MSREI’s industrial know-how as we continue to expand and enhance this best-in-class industrial park. These are exciting yet crucial times for us as we expect more such strategic partnerships in the near future.”

MSREI is the global private real estate investment management business of American multinational investment bank and financial services company Morgan Stanley. It has entered into this development pact through one of its affiliate entities.

Vineet Sekhsaria, Executive Director and Head, Morgan Stanley Real Estate Investing India said, “We believe that Palava will soon become the most strategic location for logistics and industrial development in Western India. Given excellent infrastructure with multiple connectivity routes to the city and upcoming trans-harbor sea-link, Palava will have benefits, unlike any other location.”

The industrial and logistics park is strategically located close to Jawaharlal Nehru Port Trust (JNPT), the upcoming Navi Mumbai International Airport, and the industrial hub of Taloja MIDC and provides flexible and scalable growth options to companies. It is part of the 4,500-acre Palava city that provides a comprehensive and established ecosystem including high-quality residences, social housing, world-class education, and healthcare.

The PILP continues to emerge as the preferred partner for multinational corporations looking to invest in warehousing and industrial space solutions in Mumbai. The company has already entered into a number of key deals for development at the park, with a strong pipeline of marquee clients in the e-commerce, fast-moving consumer goods (FMCG), and light manufacturing sectors.

In July, Flyjac Logistics, subsidiary of Japanese logistics company Hitachi Transport System Group, acquired over 22.3-acre land parcel from Lodha Group at this industrial and logistics park to develop and set up its operations. Flyjac Logistics was the fourth large multi-national logistics company to ink a pact to set up operations at PILP since January, apart from FM Logistics, Katerra, and Swegon.

The logistics and industrial real estate sector have been showing robust growth across the country over the last few years owing to the implementation of the Goods and Services Tax (GST).

The industrial and logistics category has emerged as a key development driver in real estate, and the growth of the online retail segment has resulted in increased demand for warehouses, leading to higher investments in infrastructure and supply chain modernisation.

According to the reports, Institutional investment in real estate may fall 20% in 2021

By
Aishwarya Raj Singh
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Institutional investments in real estate may fall 20% to USD 4 billion during this calendar year because of a higher inflow of funds in 2020, according to property consultant JLL India.

According to the reports, Institutional investment in real estate may fall 20% in 2021

During the January-September period, the institutional investment rose to USD 2,977 million from USD 1,534 million in the year-ago period.

JLL said in a statement, “Unless some large portfolio deals are not inked at the end of the year, annual investments are expected to be in the USD 3.8-4 billion range in 2021.”

Institutional investments managed to cross the USD 5 billion mark in 2020 due to large portfolio deals worth USD 3.2 billion during the last quarter of the year.

“However, 2021 witnessed more broad-based recovery with 31 deals during the first nine months as against 19 deals during the same period of 2020,” it noted.

On the outlook for the next year, JLL India expects investments to cross USD 5 billion mark, which was witnessed by the Indian real estate annually during the 2017-2020 period.

The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs and sovereign wealth funds. It also includes anchor investors in REITs.

JLL India said, “Investors, apart from the office sector, also allocated fresh capital in the residential segment, which staged a smart recovery, while warehousing and data centres continued to attract investments.”

The retail sector witnessed capital commitments through investment platforms that remain bullish on its growth prospects, it added. Radha Dhir, CEO and Country Head, India, JLL, said, “The performance of institutional investments in the Indian real estate during 2021 can be summed up in one theme ‘increasing immunity to uncertainty’.”

The Indian economy is expected to gain further strength and broad-based investment growth on the back of a low-interest environment, continued monetary stimulus, improving revenue visibility across asset classes, and inclusive growth policy, she added.

Listing of REITs, distressed opportunities, asset diversification, high growth data centre, and logistics segments will drive the investment momentum in 2022, Dhir said.

UAE Central Bank launches framework to improve oversight of real estate lending

By
Aishwarya Raj Singh
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On Monday, the Central Bank of the United Arab Emirates said that it would use new criteria to supervise banks’ exposure to real estate, a crucial sector of the Gulf state’s economy which has been sluggish for years.

UAE Central Bank launches framework to improve oversight of real estate lending

The regulator is introducing an “enhanced framework” that will cover all types of on-balance-sheet loans and investments, and off-balance-sheet exposures to the real estate sector, it said in a statement.

This will require “banks to review and improve their internal policies to enhance sound underwriting, valuation and general risk management for their estate exposures,” it said.

Residential property prices in Dubai, one of the UAE‘s emirates, had been falling since 2014 on high supply and weaker demand, forcing construction firms to cut jobs and halt expansion plans, and leading to rises in banks’ bad loans.

But the sector bounced back this year, thanks to a successful vaccination roll-out and an early easing of COVID-19 restrictions, which boosted Dubai’s economy as trade and travel sectors opened up.

The central bank said, “Banks with higher risk-weighted real estate exposure in their portfolios will be subject to a more extensive supervisory review of their underwriting and risk management practices in this segment.”

The regulator will give banks one year to enhance their practices to meet the new requirements, starting from Dec. 30.

Bondholders have not asked for accelerated repayments yet, says China’s Kaisa

By
Aishwarya Raj Singh
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On Monday Kaisa Group said that it has not received any notice from bondholders to accelerate repayments yet as the embattled Chinese property developer has not repaid a $400 million offshore bond.

Bondholders have not asked for accelerated repayments yet, says China's Kaisa

The firm said it also did not pay the coupon totalling $105 million for notes due in 2023, 2025, and 2026, with the grace period for the first two already expired.

The non-payment on the $400 million maturity on Dec. 7 triggered cross-default provision on all its $12 billion offshore bonds and prompted a downgrade to “restricted default” by Fitch Ratings.

Kaisa is the second-largest dollar bond issuer among China’s property developers after China Evergrande Group, which has more than $300 billion in liabilities.

The fate of Kaisa, Evergrande and other indebted Chinese property companies has gripped financial markets in recent months amid fears of knock-on effects, with Beijing repeatedly seeking to reassure investors.

Shares of Kaisa tumbled 8.7% to HK$0.84 in the early session on resumed trading, a record low, after a suspension since Dec. 8.

Kaisa said it was still in talks with bondholders over a debt restructuring deal and it had hired Houlihan Lokey as its financial adviser and Sidley Austin as a legal adviser.

Kaisa was in talks with Lazard, the adviser of a group of offshore bondholders, to sign a non-disclosure agreement (NDA), Reuters has reported, laying the groundwork for further discussions on forbearance and financing solutions.

The group planned to use up to $1 billion in order to buy bad loans from the Chinese developer’s onshore creditors, sources said last week.

In the Monday filing, the developer added after significant decline in sales in October and November, it expects the confidence of potential property purchasers to remain subdued in December.

Stocks edge lower in Real Estate market

By
Aishwarya Raj Singh
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Real Estate stocks were trading in red, with the S&P BSE Realty Index decreasing 31.99 points or 0.81% at 3923.98 at 13:50 IST.

Stocks edge lower in Real Estate market

Among the components of the S&P BSE Realty Index, Mahindra Lifespace Developers Ltd (down 2.26%), Indiabulls Real Estate Ltd (down 1.56%), DLF Ltd (down 1.19%), Godrej Properties Ltd (down 1.08%), Oberoi Realty Ltd (down 0.77%) were the top losers. Among the other losers were Phoenix Mills Ltd (down 0.24%) and Brigade Enterprises Ltd (down 0.01%).

On the other hand, Prestige Estates Projects Ltd (up 1.02%), Sunteck Realty Ltd (up 0.78%) and Sobha Ltd (up 0.61%) turned up.

At 13:50 IST, the S&P BSE Sensex was up 176.91 or 0.31% at 57964.94.

The Nifty 50 index was up 43.55 points or 0.25% at 17264.95.

The S&P BSE Small-Cap index was down 154.47 points or 0.53% at 29090.36.

The S&P BSE 150 Midcap Index was down 51.23 points or 0.58% at 8829.72.

On BSE, 1437 shares were trading in green, 1852 were trading in red and 104 were unchanged.

Indiabulls Housing Finance promoter to sell 11.9% stake via block deal

By
Aishwarya Raj Singh
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Sameer Gehlaut, the founder of mortgage financier Indiabulls Housing Finance, will sell an 11.9 percent stake in the company via a block window deal, CNBC TV 18 reported on December 15.

Indiabulls Housing Finance promoter to sell 11.9% stake via block deal

The deal to offload his stake is likely to be in the range of Rs 262.35-Rs 267.60 per share, sources told the news channel, adding that, the entire deal is pegged at over Rs 1,400 crore.

The report added that the investment banking group Jefferies will be the sole broker to deal as per the terms obtained.

The report comes around a month after Indiabulls Housing Finance posted an 11 percent dip in its net profit in the second quarter of financial year 2021-22.

The lender registered a profit of Rs 286 crore in the July-September quarter, whereas, its profit stood at Rs 323 crore in the same period last year.

Gehlaut, who is serving as the non-executive director of Indiabulls Group, had on October 14 resigned as the non-executive chairman of one of the group’s key units – Indiabulls Real Estate.

The company had claimed that he has resigned from the post as he would focus on the business of providing technology-enabled transaction finance and primary healthcare services by Dhani Services Limited. Notably, Gehlaut is the founder, promoter, chairman and CEO of Dhani Services.

Rs 5 lakh fine imposed on Shirja Real Estate for causing pollution in Greater Noida

By
Aishwarya Raj Singh
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A real estate developer was slapped with a penalty of Rs 5 lakh for continuing construction work at a housing project and causing air pollution in violation of guidelines in Greater Noida on Tuesday, officials said.

Rs 5 lakh fine imposed on Shirja Real Estate for causing pollution

The Greater Noida Industrial Development Authority (GNIDA) officials said that the developer has been directed to remit the fine amount within 15 working days and sprinkle water on the site in order to check pollution.

A GNIDA official said, “We received information regarding construction work being underway at the Coco County housing project by developer Shirja Real Estate Solutions Private Limited following which a GNIDA team led by Senior Manager Shyodan Singh inspected the site.”

“The information was found to be true and the construction work was causing pollution, hence a fine of Rs 5 lakh imposed on the developer, who has been given a fortnight’s time to remit the amount,” the official added.

Meanwhile, GNIDA CEO Narendra Bhooshan appealed to the residents of Greater Noida to cooperate in checking pollution by adhering to best practices like not burning waste or raising dust.

He also appealed to the residents to follow anti-pollution guidelines issued by the National Green Tribunal, the state pollution control board and the local authority.

“People with pollution-related grievances can contact the GNIDA on 0120-2336046/47/48/49 for redressal of their issue and also use the WhatsApp number 8800203912,” Bhooshan said. PTI KIS SNE

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Delhi’s Connaught Place beats San Francisco in premium office rental cost

By
Aishwarya Raj Singh
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Delhi’s Connaught Place-home to premium real estate, especially commercial property-continues to be among the most expensive office markets in the country.Delhi’s Connaught Place beats San Francisco in premium office rental cost

According to international property consultant firm, JLL’s Premium Office Rent Tracker, the Connaught Place area has climbed up rankings in over a year-from 25 to 17-with the average occupancy cost around $109 sq. ft. per year (approximately ₹8,271), making it costlier than San Francisco.

The rent tracker compares occupancy costs for premium office buildings globally. The current edition covers 127 office markets and sub-markets across 112 cities. Occupancy costs are calculated as the cost of net leasable area (actual area to be given on rent) and includes costs for an occupier, including the rent, service charges, and government taxes payable on the rent.

Mumbai’s BKC with an annual occupancy cost of $102 per sq. ft. (₹7,740 approximately) is the second most expensive Indian city office market. The city’s central business district stands at 63rd position globally with an annual occupancy cost of $58 per sq. ft. (₹4,401).

Annual occupancy costs remained stable at $51 per sq. ft. (₹3,870) for Bengaluru, while in Gurgaon, Delhi NCR, it decelerated from $48 per sq. ft. (₹3,642) to $44 per sq. ft. (₹3,339). If affordability is considered, Chennai with an occupancy cost of $21 per sq. ft. per year (₹1,594) is the fourth most affordable office market globally.

Samantak Das, Chief Economist and Head of Research & REIS (India), JLL said, “Except Connaught Place in Delhi, and Bengaluru, all other major office market rental values have contracted, largely on account of the economic disruption in the wake of the second wave and landlords being flexible for existing and new tenants.”

The BFSI and global capability centres are driving premium building rents in India. Premium markets of Connaught Place and Mumbai BKC are driven largely by banking and financial services firms, which is in line with the global trend. In Bengaluru’s case, global capability centres and technology companies are key occupier segments in its premium markets.

As per the Analysts, Real estate demand reaches pre-Covid levels

By
Aishwarya Raj Singh
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After it was badly battered by pandemic-led lockdowns, the ease in restrictions and subsequent economic recovery has boosted the volumes of the domestic real estate sector, say industry insiders and analysts.

As per the Analysts, Real estate demand reaches pre-Covid levels

The trend is expected to continue during the upcoming year, they say, adding that the sector’s current volumes have almost reached the pre-Covid levels.

ICRA Vice President Mathew Kurian Eranat said, “The factors that have supported strong recovery in demand are expected to remain in place for the near to medium term as well, including increasing preference for own homes as against renting, higher demand for larger homes with better amenities, as well as, improved affordability.”

“Thus, the demand trends are expected to sustain going ahead into 2022 as well with developers lining up new project launches to meet the demand.”

IIFL Finance’s Head of Real Estate Business, Pranav Dholakia said: “Residential real estate space has seen an uptick over the last few months largely driven by increase in economic activity post the second wave.”

“A sizable pent-up demand for quality homes, better affordability due to soft interest rates and supportive government policies have created a conducive environment.”

However, a rise in input costs for construction materials has become a major headache for the sector.

“A point of concern this year was that because of the inflation, construction costs have skyrocketed,” Mantra Properties CEO Rohit Gupta said.

In the past one year, the Nifty Realty index rose 77% to 507 points. Index value typically provides an indication about the market sentiment.

“Real estate demand is improving since the start of the opening of the economy and the festive season supported by factors like lower interest rates, tax relaxation for first time buyers under ‘PMAY‘ (Pradhan Mantri Awas Yojana ) and stamp duty cut,” Choice Broking Research Analyst Ankit Pareek said.

“We are positive on the real estate sector and expect demand to improve in coming years with the government’s focus on Infrastructure development.”

According to CREDAI Omicron Covid variant will not immediately impact the property market

By
Aishwarya Raj Singh
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Real estate developers’ apex body CREDAI (Confederation of Real Estate Developers’ Associations of India) does not see an “immediate impact” of the Omicron Covid variant on property bookings.

According to CREDAI Omicron Covid variant will not immediately impact the property market

While the cost of apartments are expected to see a 5 – 10% rise at the end-user level, primarily to off-set a similar or “more than that” hike in raw material cost; bookings of existing properties or launch of new ones are unlikely to see an immediate adverse effect.

Harsh Vardhan Patodia, President, CREDAI said, “The long term impact of Omicron is yet to be ascertained. But, as of now, we do not foresee a slowdown in bookings or new property launches because of the variant. The festive momentum is expected to continue for quite some time now.”

Patodia added that property bookings have been at pre-Covid levels despite “possibility of an increase at the end-user levels”. Micro-market fluctuations could see a higher (than 5-10 per cent) price rise for buyers.

Property consultants Knight Frank India had recently said that despite the strong second wave of the Covid pandemic, property sales were likely to increase over the 2020 level this calendar year driven by pent-up demand, festive sales, gradual recovery of India’s economy, stronger employment market and low home loan interest rates.

Sharad Agrawal, Executive Director – Capital Markets, Knight Frank India, said the property market seems to have a clear sense that the real estate cycle, which witnessed a turn from the festive season, is a durable one. And that it will continue for some quarters.

Agrawal said, “We expect the demand to become broad-based as the cycle progresses. We are also witnessing pricing power come back in the property developers’ hands combined with strong volumes. This has led to a re-rating of the sector which is driving the realty index.”

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