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NEW DELHI: DLF, a leading real estate developer, has announced a notable growth of 12.13% in its net consolidated profit for the quarter ending on June 30, 2023. The company’s profit after tax reached Rs 526.11 crore in Q1 FY24, compared to Rs 469.21 crore in the corresponding quarter of the previous fiscal, as stated in a BSE filing.
During the same period, DLF’s net consolidated total income saw a marginal increase of 0.36%, reaching Rs 1,521.71 crore compared to Rs 1,516.28 crore recorded in a similar quarter last year.
Notable developments during the quarter include the approval of the scheme of amalgamation involving DLF Golf Resorts and DLF Homes Services with DLF Recreational Foundation by the National Company Law Tribunal (NCLT), Chandigarh bench, as per the order dated June 15, 2023.
Additionally, the board of directors of a wholly-owned subsidiary company approved the divestment of a 49% stake in Pegeen Builders & Developers in favor of a developer from Mumbai to undertake a project in Andheri West, Mumbai.
DLF achieved new sales bookings of Rs 2,040 crore during the quarter while maintaining a gross margin of 52%.
In a media release, the company emphasized its commitment to strengthening its balance sheet and generating cash. It highlighted strong collections that contributed to a further reduction in net debt, resulting in the lowest-ever net debt of Rs 57 crore.
DLF’s office portfolio exhibited stability, and its retail business continued to experience upward growth momentum.
DLF Cyber City Developers, a subsidiary, reported consolidated revenue of Rs 1,412 crore in Q1 FY24, reflecting year-on-year growth of 12%. The consolidated profit for the quarter stood at Rs 391 crore, showcasing a year-on-year growth of 21%.
The Enforcement Directorate (ED) investigating the multi-crore school job case in West Bengal has revealed in its latest charge sheet the involvement of prominent real estate companies in Kolkata through which prime accused Sujay Krishna Bhadra allegedly channeled the proceeds of the scam.
According to sources, the charge sheet, filed at a special court of the Prevention of Money Laundering Act (PMLA) on July 28, sheds light on Bhadra’s network with these real estate companies to divert the funds. The charge sheet indicates that Bhadra’s two companies, in which he was the principal shareholder, engaged in “equipment supply agreements” with these real estate development agencies, receiving substantial amounts of money from them. The transactions were then recorded in their books as payments for equipment supply.
In recent raids at the offices of four real estate development entities, the ED procured crucial documents related to these transactions. Both of Bhadra’s companies were established in March 2020 during the Covid-19 lockdown.
The extensive 7,600-page charge sheet, with a principal charge sheet of 125 pages, also outlines Bhadra’s connections with influential individuals and how he artificially inflated the share price of a particular company with the help of a city-based chartered accountant.
Additionally, the charge sheet revealed Bhadra’s alleged role as a main link between the former state education minister and Trinamool Congress secretary general Partha Chatterjee and expelled youth Trinamool Congress leader Kuntal Ghosh, both of whom are currently in judicial custody for their alleged involvement in the school job case. Bhadra also maintained close ties with Trinamool Congress legislator and former president of the West Bengal Board of Secondary Education (WBBPE), Manik Bhattacharyya, who is also in judicial custody in connection with the same case.
China’s Minister of Housing and Urban-Rural Development, Ni Hong, has called for stronger measures from financial regulators and lenders to revitalize the country’s struggling property sector. In a recent meeting with property developers and builders, Minister Ni Hong proposed considering homebuyers who have paid off previous mortgages as first-time purchasers.
Currently, buyers with a mortgage history but without a property face higher down-payment rules. This move is part of the government’s efforts to stabilize the property market, which is a vital component of the world’s second-largest economy.
The property market crisis in China has been hindering the country’s economic recovery and has prompted expectations for additional government actions to stimulate demand. Home sales experienced further declines in June after a brief rebound earlier in the year, putting pressure on debt-laden developers and reducing demand for resources like iron ore.
Minister Ni Hong also urged for more measures, such as relaxing down-payment rules and reducing mortgage rates for first-home purchasers. Currently, purchasers of second homes are subjected to more restrictive borrowing limits.
The banking sector now holds a key role in implementing these measures. Earlier this month, financial regulators increased pressure on banks to ease terms for property companies by encouraging negotiations to extend outstanding loans. The aim is to ensure the delivery of homes under construction.
In a potential move to boost demand in China’s biggest cities, authorities are reportedly considering easing homebuying restrictions that have limited demand in cities like Beijing and Shanghai for years.
Minister Ni Hong’s meeting with developers followed signals from China’s top leaders that they would ease property policies. The government’s official readout of a Politburo meeting omitted President Xi Jinping’s long-used slogan “housing is for living, not for speculation,” indicating a shift toward supporting the property market.
Ni expressed the government’s strong support for home purchases to meet essential dwelling demand and the need for better housing. He also called for tax and fee relief for housing upgrades and replacements.
Stabilizing the construction industry and the real estate sector is crucial in promoting economic recovery, as both sectors play a significant role in the economy.
Despite policy efforts to reduce benchmark rates and mortgage rates, most Chinese households have not yet felt the benefits, as banks won’t reprice existing loans until the beginning of the next year. The policy push may impact earnings at banks already facing shrinking margins and tepid loan demand.
Some analysts are also concerned about the growing risks associated with debt-laden local government financing vehicles (LGFVs), as exposure to LGFVs could weaken capital positions and lead to lower dividend payouts for lenders. Market sentiment remains subdued as effective measures have yet to be fully implemented. The government appears to be preparing for further policy relaxation to address the challenges in the real estate sector.
Equitas Small Finance Bank has made a significant acquisition of a prime property on Anna Salai from Arihant Foundations and Housing Limited, marking another major real estate deal in Chennai. Industry sources reveal that the deal was finalized at approximately ₹300 crore.
The transaction stands out as one of the largest commercial purchases in recent months within Chennai’s real estate sector. The scarcity of available large land parcels along the Anna Salai stretch adds to the significance of this transaction, according to a well-informed source within the real estate industry.
The property in question, located in Saidapet, was previously owned by Aruna Timbers. Situated diagonally opposite the Ashok Leyland office and in close proximity to the Little Mount Metro station, the property spans around 17 grounds (approximately 1.14 acres). Equitas has ambitious plans to develop a vast office space at this location. Presently operating from space at Spencer Plaza, the bank aims to construct a new office space covering 1.8 lahks sq. ft. Another industry insider confirmed Equitas’ plans and noted that the development work, undertaken by Arihant, is scheduled to commence in the coming months. The project is expected to be completed within a span of two years.
During a visit to the site, The Hindu team observed the Equitas signage displayed prominently while the clearing of debris was underway, indicating the bank’s imminent presence in the area.
Kolkata: Real Estate Investment Trust (REIT) firms in India are engaging in discussions to create an association that would represent the industry and drive the promotion of this emerging investment product, which is still in its nascent stage. The envisioned association could follow the model of the Association of Mutual Funds in India (AMFI).
Currently, there are only four listed REIT entities in India. These include Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India REIT, which are office space-backed REITs, and Nexus Select Trust, the country’s first mall and retail-asset-backed REIT.
According to a senior official from a leading REIT firm, who requested anonymity, talks are underway to establish an association that would represent the REIT sector and facilitate collaborative efforts to raise awareness about this innovative product, which holds significant opportunities.
The formation of the association is currently being deliberated among all stakeholders, including the Securities and Exchange Board of India (Sebi), with details expected to be finalized within the current fiscal year. Another REIT official mentioned that the initiative is still in the preliminary stages.
The establishment of the association could play a pivotal role in setting industry standards and regulations for the REIT sector in India. This would foster a more robust and transparent market for REITs, ultimately benefiting investors, the official added.
Furthermore, the association would help promote the advantages of investing in REITs and increase awareness about this innovative investment vehicle.
REITs are investment vehicles that enable investors to acquire shares in a diversified portfolio of real estate assets. They offer a more liquid and diversified approach to real estate investment compared to individually purchasing properties.
India’s REIT sector holds significant untapped potential, with approximately 57% of existing Grade A office space, equivalent to 380 million square feet, eligible for listing as REITs. Presently, the total space managed under REITs is estimated to be around 100 million square feet, as per an official.
While the formation of the association is still in its early stages, it represents a positive development for the Indian REIT sector. The association’s establishment would help promote the product, making it more accessible to investors, as highlighted by officials.
PUNE: The Maharashtra Real Estate Regulatory Authority (RERA) has provided a 15-day window for flat buyers in Pune to submit suggestions or objections regarding the delisting of 39 projects in the city. This decision comes in response to the applications for deregistration submitted by the respective real estate developers.
Under the RERA Act of 2016, all real estate projects must be registered with the RERA in the states where they are being executed. The Act strictly prohibits booking, selling, marketing, or advertising a property without prior registration with the RERA. In Maharashtra, projects registered with the Maha RERA receive a certificate with a unique registration number. The regulator has the authority, as per sections 7 and 5 of the RERA Act, to revoke the registration of Maha RERA projects if the developer is found to be non-compliant or engaged in unfair practices.
To ensure that there are no pending rights or claims from buyers, Maha RERA has issued a public notice on its portal, inviting objections from home buyers within a 15-day timeframe. The reasons for delisting the projects include unviable projects coming to a halt, insufficient project funds, changes in government regulations, and internal disputes. The permission to delist these projects was granted by Maha RERA in February. An official from RERA stated that if no claims are received, all 39 projects will be deregistered.
According to Maha RERA, a project’s registration number is not permanent, and there can be instances where the number(s) expire or are revoked. The Maha RERA notice highlights that some projects are being abandoned, leaving no premises available for allotment as promised. In such cases, there is a need for legislative remedies to compel developers to complete projects they intend to abandon. Unfortunately, the existing Act does not provide a path to force a promoter to complete a project they have voluntarily declared themselves unable to complete in its present form.
The notice further states that none of the respondents challenging the termination of the allotment have claimed that the applicant-promoter is unable to complete the project due to financial fraud or misappropriation of funds provided by the allottees. Consequently, the authority sees no mechanism to force a developer’s hand in the absence of fraud or misappropriation.
Jehangir Dorabjee, a prominent builder and owner of Dorabjee Real Estate, commented that RERA delisting encourages developers who are unable to proceed or complete projects to consider deregistration when commercial viability within the stipulated deadline becomes unattainable.
One customer, Manish Ghule, who had invested in a project in Ambegaon Budruk, mentioned that his developer contacted him for a refund, which has been credited to his account. However, he expressed concern for other buyers who suffer significant losses due to sudden project halts after investing their life savings.
Deputy Chief Minister Devendra Fadnavis emphasized that the establishment of RERA is not meant to regulate the construction or real estate business but to promote honest work while curbing malpractices in the sector. Fadnavis, addressing members of the All India Forum of Real Estate Regulatory Authorities, highlighted that Maharashtra is the birthplace of RERA, as the state has been demanding a regulatory framework for real estate for 25 years. Taking advantage of the opportunity when the central government passed the RERA Act, Maharashtra established Maha RERA.
Fadnavis acknowledged the concerns of citizens who invest their life savings in properties in Mumbai and Pune, stating that RERA has become a hurdle for those trying to cheat unsuspecting individuals.
Abhishek Kapoor, CEO of Puravankara Limited, expressed satisfaction with the Monetary Policy Committee’s (MPC) decision to keep the policy rate unchanged at 6.5%. He believes this decision will have a positive impact on the real estate sector, as it brings stability to lending rates and supports the continued momentum in housing demand. Kapoor also mentioned the encouraging GDP growth and the strong launch pipeline by Grade A developers, which will further motivate homebuyers.
Shiwang Suraj, Founder & Director of Inframantra, stated that the RBI’s decision to maintain the repo rate would provide relief to homeowners, as it ensures steady home loan rates. Additionally, Suraj pointed out that this decision could address rupee-related challenges.
Ankush Kaul, Chief Business Officer of Ambience Group, commended the RBI’s commitment to maintaining balance and implementing prudent measures to safeguard the nation’s financial course. Kaul believes that such measures protect the Indian economy from adverse implications arising from global financial turmoil. Despite disruptions, India’s economy continues to exhibit resilience and promising growth in consumption patterns, which positively impacts home loan demand.
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East, and Africa, CBRE, noted that the RBI’s decision reflects a balanced approach towards containing inflation and managing external volatilities. The magazine expects that the tightening cycle may be nearing its end, which would boost private capital expenditure and support domestic consumption.
Naveen Kulkarni, Chief Investment Officer of Axis Securities PMS, expressed that the RBI’s decision to maintain policy rates aligns with expectations, driven by a significant drop in retail inflation and the expectation of further softening inflationary pressures in the coming months. Kulkarni anticipates an extended pause on interest rates from the regulator, with banks’ earnings growth remaining healthy, albeit at a decelerated pace compared to FY23.
Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra, believes that the RBI’s decision will keep the real estate market favorable for buyers, potentially increasing demand in the mid-segment housing market. Yagnik also expects no change in the demand for upscale and exclusive properties. However, she acknowledged that the RBI Governor has cautioned that this decision may only provide short-term relief and may be necessary to curb inflationary trends in the country. Nevertheless, Yagnik believes that this decision will contribute to the consistent growth in the real estate sector.
While the RBI’s decision to maintain the policy rate was expected, it has been welcomed by industry experts in the real estate sector. They anticipate positive outcomes such as stable lending rates, increased demand, and continued growth in the sector.
Realty experts affirm that the recent approval of the Gurugram Metro project will have a transformative effect on the city, generating increased investment and business opportunities. With the imminent completion of the Dwarka Expressway and the upcoming Rapid Rail Transport System (RRTS), the commencement of Metro line construction instills positive sentiments among buyers and investors alike.
Furthermore, the Metro and RRTS systems are expected to alleviate congestion and traffic issues in Gurugram and southern Haryana. Companies and corporations, previously focused on expanding solely in Noida and Greater Noida, are now compelled to reconsider their strategies. The enhanced connectivity facilitated by the Metro extension will link Gurugram railway station, the proposed interstate bus terminal, and eventually the Blue Line of Delhi Metro from Dwarka. This significant boost in mobility will attract further investments to Gurugram.
The high-potential corridor of Dwarka Expressway, which has already garnered favor among investors due to its attractive returns, is poised to benefit significantly from Metro’s approval. Vinod Behl, a real estate expert, asserts that the inclusion of the Delhi-Gurgaon-Alwar RRTS project in the National Infrastructure Pipeline (NIP), along with the Union approval for the Metro project, will significantly enhance both intra- and intercity connectivity.
Pradeep Agarwal, the founder, and chairman of Signature Global, foresees a realty upswing along the Dwarka Expressway and the new sectors with improved commuting options that will generate additional investments and job opportunities, benefiting the entire region.
Real estate consultants and executives echo the sentiment that the Metro and RRTS systems will resolve congestion and traffic woes, leading to a shift in companies’ preference towards Gurugram. The completion of the Metro within the next few years will establish seamless connectivity between commercial and residential micro-markets, attracting businesses and bolstering the potential of areas along the Dwarka Expressway.
As the Metro route develops and Metro stations emerge, property prices and rentals along the line are expected to witness a significant surge, similar to the scenario in Delhi. Enhanced connectivity and accessibility have historically attracted investors and homebuyers, stimulating demand for properties.
The commercial real estate market anticipates a surge in customers as the ease of commute increases. With the Metro project, more commercial establishments are expected to expand across Gurugram, leading to the creation of additional commercial spaces along the Metro alignment.
The Metro line is poised to alleviate traffic congestion, a long-standing challenge in Gurugram. The government’s expansion of the Metro network will have a positive impact on the real estate market, influencing property prices, investment opportunities, and overall demand for real estate in Gurugram, according to Navderp Sardana, chairman and managing director of Whiteland.
In an exciting development, Transindia Real Estate has announced its plans to divest stakes in its logistics parks to funds managed by global investment firm Blackstone. This move comes as the company, which was demerged from Allcargo Logistics, aims to focus solely on its real estate business and fuel its growth plans.
The divestment includes the sale of a logistics park in Jhajjar, valued at approximately Rs 625 crore, and a 10 percent stake in several other parks. Among the parks involved in the stake sale are Malur Logistics & Industrial Parks Private Limited, Venkatapura Logistics & Industrial Parks Private Limited, Kalina Warehousing Private Limited, Panvel Warehousing Private Limited, and Allcargo Logistics & Industrial Park Private Limited. The equity consideration for this 10 percent stake amounts to around Rs 60 crore.
Transindia Real Estate Limited, the recipient of the cash proceeds, is expected to receive over Rs 400 crore from these divestments. The company believes that this infusion of funds will provide the necessary resources to drive growth and execute new projects in the real estate sector, particularly in the domain of logistics parks.
The decision to sell the stakes in the logistics parks and streamline its focus aligns with Allcargo Group’s long-term strategy. Shashi Kiran Shetty, Founder and Chairman of Allcargo Group, expressed that this transaction strengthens their balance sheet and allows them to build comprehensive capabilities in the real estate business, encompassing asset development, leasing, and sale.
Jatin Chokshi, Managing Director of Transindia Real Estate Limited, sees this transaction as a stepping stone towards future growth. With a stronger balance sheet, the company is well-equipped to undertake new projects and capitalize on key opportunities in the real estate sector.
The stake sale has generated a positive market response, as shares of Allcargo Logistics witnessed a 3.27 percent increase, closing at Rs 293.50.
Transindia Real Estate’s strategic decision to sell stakes in its logistics parks marks an important milestone in the company’s journey, enabling it to unlock cash proceeds, strengthen its position in the market, and pursue ambitious growth plans.
The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has taken the decision to deregister 55 real estate projects across the state in the past three years. Officials from UPRERA have attributed this action to factors such as a lack of demand and inadequate financial resources.
According to UPRERA, there are currently two pending applications for the withdrawal of project registration. The largest number of deregistered projects were located in Lucknow, with a total of 12 surrendered projects. Following closely behind were Gautam Buddha Nagar and Varanasi, with eight projects each.
Additional districts affected by deregistration included Ghaziabad, Prayagraj, Agra, Meerut, Mathura, Muzaffarnagar, Chaundali, and Barabanki, each with three or two projects. Kanpur City, Gorakhpur, Bareilly, Moradabad, Unnao, and Amroha each had one project being deregistered.
An anonymous UPRERA official stated that the first application for withdrawal of project registration was received from Muzaffarnagar in July 2020, which was subsequently approved. Since then, a total of 55 projects have been deregistered across 17 districts of the state, with the most recent approval for withdrawal granted to Artha Infratech in March 2023.
The official further mentioned that two promoters have applied to surrender their projects in Ghaziabad and Lucknow. Mahagun (India), one of the promoters, has sought to surrender its Mahagun Mascot Phase-II project in the Crossings Republik township of Ghaziabad. The application is currently under scrutiny.
The reasons behind the withdrawal or surrender of project registrations are often attributed to factors such as lack of demand in the region, failure to meet anticipated sales targets, or financial constraints hindering project completion. UPRERA officials emphasized that promoters can surrender their projects only after settling all dues and claims from investors and homebuyers.
As per the Real Estate (Regulation and Development) Act, promoters are permitted to deregister or surrender projects if they are deemed unviable. The process involves a formal request from the promoter to surrender the project and the publication of a public notice, inviting investors and homebuyers who have booked apartments in the project to submit their claims for clearance.
It is crucial to ensure the protection of the interests of all stakeholders, especially homebuyers, throughout this process.