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Arun Developers, Pune

Arun Park, Opp. Aditya Birla Hospital,
Chinchwad, Pune - 411033

Policy regime nudged fence-sitters to be first-time homebuyers: Niranjan Hiranandani

Policy regime nudged fence-sitters to be first-time homebuyers: Niranjan HiranandaniHe believes that the regulatory aspects have also brought in a safe and secure environment to the sector.Rajesh KurupThe need for secured assets and aspirations to own spacious homes as remote working is fast becoming the new norm is driving sales of residential properties across the country. Further, investors are also warming up to Real Estate Investment Trusts (REITs), Niranjan Hiranandani, national president at National Real Estate Development Council (NAREDCO).In an interview withBusinessLine, Hiranandani, who is also the managing director of real estate firm Hiranandani Group, is of the opinion that the regulatory aspects have also brought in a safe and secure environment to the sector. Edited excerpts:This year, housing sales across major cities have been on the rise? Where is this demand coming from?The disruptive pandemic has predominantly reinforced the value of owned houses. The need for a secured asset that offers stability and safety in crisis is a goldmine investment against volatile assets. The remote working trend further fuel the urge to own a large spacious home in peripheral cities at attractive price points to integrate new normal living conditions.In addition, market dynamics and policy regime are skewed towards nudging the fence-sitters to convert into the first-time home buyers and existing ones to upgrade into luxury homes catalysed by fiscal growth levers.After the initial hesitation, REITs are gaining ground, and despite the pandemic, there were two successful public issues?REITs are an alternative option for investment in real estate at a low unit price entry point. It reflects growing confidence in commercial real estate as an asset class. The Indian real estate investor has gradually warmed up to REITs. The two successful public issues are just the beginning of what will gradually grow in investor confidence.Recently Maharashtra Urban Development ministry has amended the Unified Development Control and Promotion Regulations, allowing 5 per cent amenity space for construction in plots. Your comments?The recent amendment (notification is awaited) aims to infuse positivity for commercial real estate development. If up to 5 FSI is allowed for commercial business districts, then the move will be perceived to augment more commercial real estate spaces to be developed, which will create more employment opportunities. This will also foster the development of more commercial business districts (CBDs) in the state, ensuring equal development across and not just the leading commercial cities like Mumbai and Pune. The move should augur well for the state’s economic growth. It will also allow economies of scale to positively impact the viability of commercial projects.A lot of residential projects in the country, including ultra-luxury ones, are marred by delays?The Indian real estate sector was rebooted with structural policy reforms, and the pandemic was a nail in the coffin. The industry suffered from liquidity starving, muted demand, subdued investment, hindered sales velocity, disrupted supply chain, skyrocketing prices of essential raw materials, and acute migrant labour crisis. These challenges uprooted many developers in crisis and stalled up the designated timelines.With mission unlocking, the industry witnessed excellent sales velocity in lieu of fiscal stimulus but the resurgence of the second Covid wave derailed the growth trajectory. The authorities have been considering a timeline extension to cope up with the delays. Many of the branded developers with strong financial discipline and proven track records will fast-track the work progress and assure timely delivery.Covid-19 has shuttered smaller players across various industries, while the stronger, larger entities have survived. Did the pandemic have a similar effect on real estate as well?Any economic crisis – and the Covid-19 pandemic fits the description perfectly – first impacts smaller players across industries, as surviving such challenging situations needs ‘deep pockets. For financially weak players, recent regulatory jolts led to a difficult ground for navigating, and Covid-19 impacted many projects’ profitabilities and viability of the business.The over-leveraged players opt to deleverage by consolidation, joint development, asset-light model, monetisation, mergers to re-anchor the sinking ship.RERA has brought in some amount of transparency and accountability to the sector?RERA is moving in the right direction and is taking the industry to the right aspects of accountability. The regulatory aspect has brought in a safe and secure environment, one in which we see unscrupulous elements being weeded out. Obviously, this also leads to enhanced customer confidence.On Greenbase’s, an industrial and warehousing platform of Hiranandani Group, future plans?Greenbase has been working at delivering a holistic slew of offerings for end-users, and there are geographies where we are already working on creating logistics and light industrial parks.As the vaccination drive gains pace, we are bullish on the Indian economy and the sustained demand for logistics and light industrial parks. Some locations (near Pune, Nasik and Oragadam, Chennai) are ‘work in progress’, while in some other locations, the parks are still on the drawing board.
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PE investment in real estate touch $2.9 billion in H1 2021: Report

PE investment in real estate touch $2.9 billion in H1 2021: ReportThe total private equity inflows in the real estate sector are expected to be about USD 5 billion in 2021, a 4.1% increase from 2020, according to the company.PE investment in real estate touch $2.9 billion in H1 2021: ReportNEW DELHI: Private equity investment in Indian real estate touched USD 2.9 billion in the first half of 2021, more than a two-fold increase from H1 2020, according to recent report by Colliers.The total private equity inflows in the real estate sector are expected to be about USD 5 billion in 2021, a 4.1% increase from 2020, according to the company.Office assets accounted for 35% of the total investments in H1 2021, followed by industrial and warehousing assets with a share of 27%. Investors are viewing the current scenario as an opportunity to snap up properties at attractive valuations."The investment trends reflect an interest in broader classes of assets and structures. Deal types include, forward purchase of office assets, formation of platforms and acquisitions with development risks in office assets, opportunistic acquisitions of retail assets, industrial assets including warehousing and data centers, large credit transactions for portfolio acquisitions, and development financing," said Piyush Gupta, MD, Capital Markets & Investment Services (India), Colliers.During H1 2021, about 86% of the total investments in the office sector were in land or projects under-construction. Investors continue to scout for either land or assets in under-construction stage, as they look to build their portfolio for a future REIT listing. This is due to limited availability of quality rent-yielding assets at attractive valuations, as most of the large developers are already in partnerships with institutional investors.Investments in retail assets accounted for 29% of the total investments in H1 2021. Despite Covid posing a significant disruption to retail businesses and causing a major drop in rental revenues, investor appetite remained intact for exposure to stabilized retail assets as well as for investments in ground-up developments in partnership with selective developers."For the remainder of the year, we also believe that last-mile funding and investments into distressed housing assets will gain traction whilst many investors are also looking at investing in attractively priced assets, which may not be the current flavour but are expected to witness increasing demand post covid-19 as demand picks up for them," said Siddhart Goel, senior director & head, Research at Colliers India.
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Real estate market to touch $1 trillion by 2030: Housing secretary

Real estate market to touch $1 trillion by 2030: Housing secretary​The number of people employed in the sector is also expected to rise to 7 crore in coming years, from 5.5 crore in 2019, he said while addressing a CII event on the real estate sector.Real estate market to touch $1 trillion by 2030: Housing secretary NEW DELHI: The Indian real estate market is estimated to touch USD 1 trillion by 2030 driven by rising demand and various reforms in the past seven years like new realty law RERA, Housing and Urban Affairs Secretary Durga Shanker Mishra said on Wednesday.The number of people employed in the sector is also expected to rise to 7 crore in coming years, from 5.5 crore in 2019, he said while addressing a CII event on the real estate sector. The secretary further said that the states have been asked to soon implement the Model Tenancy Act, which was passed by the Union Cabinet in June this year. Mishra also clarified that the law once implemented by the states will be prospective in nature and all disputes related to rent agreements will be dealt under the old laws of respective states. He pointed out that the real estate sector suffered a "setback" during the first and second wave of the COVID-19 pandemic but said the housing demand has revived. "The size of the real estate sector was around USD 200 billion 2-3 years ago. We expect the real estate market to touch USD 1 trillion by 2030," the housing secretary said. "It is not mere talk and guess work. The trend clearly shows that the real estate sector of our country will touch the figure of USD 1 trillion in the next 7-8 years," Mishra said, while emphasising the importance of this industry in the Indian economy. Citing various reports of property consultants, the secretary said housing demand in the first quarter of this fiscal year has risen as compared to the year-ago period. Talking about the importance of this sector in employment generation, he said: "Around 5.5 crore people were employed in the sector as per 2019 figure. Our predictions for the future is that around 7 crore people will be employed in this industry." That apart, Mishra said the real estate sector creates demand for about 270 other industries, including cement and steel. "Therefore, real estate is an important sector of the economy. Nobody should have any doubt about it," he stressed. Hence, Mishra said, the government has given a lot of focus on this sector in the past seven years and has taken measures in every budget since 2014. The secretary said it is estimated that around 88 crore people will be living in urban areas by 2051 as against the current 46 crore, creating huge potential for real estate development. Describing the enactment of new realty law RERA as the biggest reform, he said the new legislation has taken the industry to another level. "RERA has transformed this sector and changed the perception of this industry. Consumers now have confidence that their investments are safe," Mishra said. Sharing the success story of RERA, he said around 67,000 projects and 52,000 property agents are registered under this law. More than 70,000 cases have been disposed of by the real estate authorities established under this law. All states, except West Bengal have implemented this law, he said, adding that the ministry has written to the state government regarding this. He listed Model Tenancy Act as another reform that would create a lot of demand for rental housing in the country. The secretary said the ministry has asked all states to implement this law at the earliest. Referring to media reports raising concerns related to the fate of traditional 'Pagdi agreements' in Mumbai, Mishra said the new law will be prospective and not retrospective. Therefore, he said the existing rent agreements will not come under its ambit. "It will be prospective in nature." The provisions of this Model Tenancy Act clearly mention that all disputes related to existing rent agreements will be dealt under the old laws even after their repealment, the secretary emphasised. Mishra also talked about reforms for ease of doing business in the real estate sector. He said the government has taken steps to provide online permission for construction, which will eliminate delays and corrupt practices. The secretary highlighted other reforms like introduction of Real Estate Investment Trust (REIT) and the launch of stress fund named SWAMIH to complete stalled housing projects. Mishra said the Affordable Rental Housing Complex (ARHC) scheme launched by the government to develop homes for migrant workers will also create business opportunities for the sector. The secretary asked the real estate industry to focus on affordability of residential properties to attract buyers from lower and middle income group. Neel Raheja, Co-Chair, CII National Committee on Real Estate and Housing and Group President of K Raheja Corp, talked about high government charges and finance cost in the sector that impacts affordability. Anshuman Magazine, Deputy Chairman of CII Northern Region and Chairman and CEO - India, SE Asia, Middle East & Africa at CBRE, expressed confidence about the future growth of all the segments of the real estate sector. Mohit Malhotra, Managing Director & CEO of Godrej Properties Ltd, said the industry needs to attract equity capital to fuel growth. He also stressed on improving productivity by use of latest technology. Malhotra said the real estate sector is getting consolidated from highly fragmented. Amit Gossain, Chairman, CII Urban Development and Smart Cities Council and Managing Director of KONE Elevators India Ltd, said the COVID-19 pandemic has brought "short-term blip" in the sector and felt that long-term growth potential remains intact.Follow and connect with us on Twitter, Facebook, Linkedin
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Mumbai real estate: Respect all religions. But only from a distance

Mumbai real estate: Respect all religions. But only from a distanceA key inference from the Pew survey is that while Indians say it is important to respect all religions, major religious groups feel they have little in common, and want to live separately.Representational image of Powai, Mumbai. The Pew survey 'Religion in India: Tolerance and Segregation' crystalized something we've known all along: people prefer neighbours from similar religious backgrounds, even in Mumbai.Representational image of Powai, Mumbai. The Pew survey 'Religion in India: Tolerance and Segregation' crystalized something we've known all along: people prefer neighbours from similar religious backgrounds, even in Mumbai.At the peak of the COVID-19 crisis last year when developers in Mumbai were in utter panic, a prospective home buyer decided to take the plunge and buy an apartment. His preferred project was one which was close to completion and had sold only one-third the inventory, causing the developer a challenge in servicing his loans. The buyer showed interest but the desperate builder rejected the buyer. The builder was not foolish or delusional in his price expectations. He merely faced a challenge that has been almost impossible to penetrate in Mumbai real estate – a Muslim homebuyer.I was reminded of this episode after reading a recent report by the Pew Research Centre titled ‘Religion in India: Tolerance and Segregation’. The key inference of the Pew survey was that while Indians say it is important to respect all religions, major religious groups see little in common and want to live separately.For me, one data set is worth delving into from a housing perspective. That data set is – Indians who say they would not be willing to accept people from another religious group as neighbours.The finding is clear – there is resistance to seeing people from another community stay next to you: 36% of Hindus and 33% Sikhs would not be willing to accept a Muslim as a neighbour. Additionally, 25% of Muslims and Sikhs would similarly not want a Christian living next-door to them; 54% of Jains would not want a Muslim neighbour; while 47% would not be willing to have a Christian neighbour. The Buddhists seem the most flexible in their choice of neighbours.In one way, the survey has broken new ground in bringing out a reality that has long existed. In another way, from a Mumbai real estate perspective, I have to concede that a survey done exclusively for the city – would throw substantially higher numbers. By national benchmarks, it is believed that Mumbai is an outlier where religion matters for little. It’s a good narrative. There is only one problem: It’s not true. And it is definitely untrue when it comes to housing.Parsis and Christians try to enable their own cocoons which permit sale or rent often only to people from their own community. The Jains prefer being only around other Jains, to the extent that there are localities that have restaurants which don’t even dare to serve non-vegetarian food. Muslims prefer having members of their own community in a locality.Due to a combination of demographics and poverty, the biggest discrimination is often faced by members of the middle and upper middle-class Muslim community. They are torn between not wanting to reside in the chaotic ghettos while being rejected from housing opportunities in localities that they want to reside in. It is tough to arrive at a specific number on this but I would reckon that at least 50% of Hindus would be uncomfortable with a Muslim neighbour. And that number would go as high as 70% with Jains. Remember, 66% of Mumbai’s population is Hindu and 4.1% follow Jainism.On the principle of fair and equal housing, it is undeniable that the Muslim community has received a raw deal over the years. At the same time, it is hard to argue against the concerns that several people have with regards to Muslims.I’m aware that there are reservations over food habits that act as a thorn in the flesh for a few communities. To be honest, I am not sure if that is a major reason for the discrimination. There are bigger reasons at work in my view. On one extreme is the perception that members of the Muslim community can be a security and safety threat, and need to be shunned. At the centre is a view that has been fostered by looking at the shoddy conditions of Muslim-dominated localities. On the other extreme is the financial point of view that says ownership of apartments by a meaningful number of Muslims in a particular project or locality often results in a decline in property values.It’s a complex phenomenon, and I take no decisive view on the subject. However, I will say that the perception against Muslims is exaggerated in comparison to ground reality. The problem is that there appears to be no solution in sight. At the public housing level there is little that can be done, given how compromised Mumbai’s housing administration is. Countries like Singapore promote inclusivity through public housing where residents of different communities are given allocation in the same premises. On the other hand, private housing is now a victim of a virtuous cycle where discrimination is so entrenched that it appears almost impossible to penetrate. The only solution, albeit slow, is if developers and societies evaluate each buyer on their individual merit and approve those that fit the sensibilities of that particular society.In the end – the Pew Survey shows us the mirror to who we have always been. We respect other religions – as long as it is from a distance.
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