December 09, 2020 - CREDAI Bengal
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December 09, 2020
CREDAI Bengal Daily News Update | 09.12.20
Newspaper/Online ET Realty ( online )
Date December 09, 2020
https://realty.economictimes.indiatimes.com/news/industry/decoding-
Link the-sudden-rush-among-top-global-investors-for-indian-office-
property/79636854
Decoding the sudden rush among top global investors for Indian
office property
“The India story happened when offices were available for a dollar, that has still not
dramatically changed, you still have offices available at a dollar per square foot per month,”
said Quaiser Parvez, chief executive officer at Nucleus Office Parks that manages
Blackstone’s office portfolio. “India will continue to be strong pivot or puller of these
organizations.”\
Some of the world’s biggest investors are snapping up office space in India with plans to turn
them into real estate investment trusts, betting that demand will sustain and provide attractive
yields in coming decades.
Brookfield Asset Management Inc. in October agreed to pay $2 billion for 12.5 million square
feet of rent-yielding offices and co-working spaces in Asia’s No. 3 economy. That’s the biggest
real estate deal ever for India. Blackstone Group Inc. bought $1.2 billion of malls and other
commercial properties from a local developer, set to further expand its 9.6 million square feet of
fully-owned real estate assets in India.
These assets will probably be folded into existing REITs or listed as new ones, according to the
people with knowledge of the matter, who asked not to be identified citing rules. Blackstone is
the backer of Embassy Office Parks REIT, which raised $689 million in the country’s first such
listing in April 2019. That was followed by another REIT that’s also backed by Blackstone in
August, while Brookfield is looking to list one in Mumbai before the end of this year. At least
two more are in the pipeline for 2021, the people said.
“The India story happened when offices were available for a dollar, that has still not dramatically
changed, you still have offices available at a dollar per square foot per month,” said Quaiser
Parvez, chief executive officer at Nucleus Office Parks that manages Blackstone’s office
portfolio. “India will continue to be strong pivot or puller of these organizations.”
The attention is focused on the country’s office market, where low-cost call centers have made
way for research laboratories that offer more stable clients and surer rents. Rolls Royce Plc has a
facility in a building owned by Blackstone in southern India and Novartis AG has a team of
doctorates. Brookfield’s technology park in northern Gurgaon has tenants including Cognizant
Technology Solutions Corp. and Genpact Ltd.
High returns are luring investors to REITs amid low interest rates globally. The REITs already
listed in India provide yields of 7.5%-8%, compared with 3%-5% in cities such as Singapore,
Beijing and Sydney, according to Ivanhoe Cambridge, the realty unit of Canada’s second-biggest
public pension fund, Caisse de depot et placement du Quebec. Currently, the Indian REIT market is dominated by institutional investors and wealthy individuals due to a regulatory requirement of a minimum 50,000 rupee ($700) investment in a nation where more than half the population earns less than 10,000 rupees a month. Kotak Mahindra Asset Management Co. on Monday opened the Kotak International REIT Fund of Funds, India’s first diversified REIT mutual fund, which will invest in units of SMAM Asia REIT Sub Trust Fund. Local developer Panchshil Realty, who has Blackstone as a partner for the majority of its 22 million square feet of offices, is considering a REIT next year to allow institutional investors to exit, Chairman Atul Chordia said in a phone interview. ‘Build, Lease, REIT’ “You build an office portfolio, you lease it, and you REIT it,” Chordia said. “You can raise capital and cut down your debt.” The coronavirus outbreak has left India’s office-property market largely unscathed. Most landlords housing large information technology and multinational companies collected 95%-99% of rents despite one of the world’s strictest lockdowns, exchange filings show. Even firms looking to permanently transition to flexible working conditions are leasing offices in India. Standard Chartered Plc, which aims to offer hybrid work to more than 90% of its employees over three years, will rent space from Indian developer DLF Ltd. for 15 years for one of its biggest global campuses.
“People will ultimately return to office. As companies rethink their cost structures, we will likely see even more demand,” said Vikram Garg, managing director at Blackstone’s India unit. Investors pumped $15.4 billion into India’s office properties in the last 10 years -- with about $2 billion in 2020 before the massive Brookfield and Blackstone transactions -- according to data from Knight Frank. Private equity funds hold 84% market share followed by sovereign wealth funds and pension funds. The research firm estimates 206 million square feet of office space was transacted in the last decade, of which 62 million have been converted into REITs, leaving a potential 144 million square feet. Ivanhoe Cambridge is looking to increase investment in India but will wait to see how the market shapes post-pandemic. A deepening secondary market is among the attractions, said Managing Director Chanakya Chakravarti. PR Dilip, founder of fund management company Impetus Arthsutra, has invested in the Embassy REIT. “Of late, the minimum ticket size to own a commercial property had become too large for a retail investor, besides the illiquidity factor in the real estate market,” Dilip said. “REITs have provided a new opportunity.” ____________________________________________________________________________________
Newspaper/Online ET Realty ( online )
Date December 08, 2020
Link https://realty.economictimes.indiatimes.com/news/residential/houses-
for-poor-under-pmay-get-52-price-hike-in-vasai-virar/79626810
Houses for poor under PMAY get 52% price hike in Vasai-Virar
Under the Prime Minister Awas Yojana (PMAY), 44,276 houses proposed at Rajawali
village are meant for the economically weaker section whose price has been increased from
Rs 14 lakh to 22 lakh.
Despite reservations from pricing committee, a low cost housing project in Vasai Virar Municipal
Corporation has got 52 per cent price hike by the state government. Under the Prime Minister
Awas Yojana (PMAY), 44,276 houses proposed at Rajawali village are meant for the
economically weaker section whose price has been increased from Rs 14 lakh to 22 lakh.
Pradhan Mantri Awas Yojana (Urban) Mission launched on June 25, 2015 intends to provide
housing for all in urban areas by 2022. Earlier BJP government had announced to build 19 lakh
houses in Maharashtra by the given deadline.
Earlier this month on November 2, the proposal came before the state level sanctioning and
monitoring committee headed by the chief secretary for approval. Mirror has accessed the
minutes of the meeting which said "the cost as per ASR (ready reckoner) is Rs 14.79 lakh. Cost
per DU (dwelling unit) demanded by PP (project proposal) is Rs 22.50 lakh which is 52.03 per
cent above ASR cost which is beyond permissible incentive of 20 per cent. Hence the proposal is
placed before the pricing committee. The current ASR rate for the year 2020-21 is Rs 50,600
accordingly the selling price of the flat is 52.03 per cent higher than ASR."
However, the project has been approved by the committee and sent to the Centre for the final
approval. Under the PMAY project, the municipal corporation gives all facilities like water
connection, electricity to the developer without any hassle. In this project, the government has
given FSI 2.5 which is one in ordinary case and exemption on stamp duty, the sources in the
housing department said.
When contacted CEO of MHADA Anil Diggikar, he refused any reservation about the project.
"There was no reservation on pricing of the houses. In Mumbai, the land cost is higher and
considering that, the pricing committee has approved the project," Diggikar said.
Chief Secretary Sanjay Kumar was not available for comment on the issue despite phone call and
text message. Housing Minister Jitendra Awhad was also not available for comment.
As per the project proposal, total dwelling units would be 76,257 of which 62,428 dwelling units
to be constructed for the economically weaker sections including 44,276 houses for the
beneficiaries of PMAY and 18,152 for free sale. Also, 13,829 of lower income group category
would be for sale. The total project cost is Rs 9,962 crore of which the Centre would pay Rs 664
crore and the state would pay Rs 442 crore and the beneficiaries would have to pay Rs 8,855crore. Questioning the hike without proper reasoning, respected architech and housing expert Chandrashekhar Prabhu said it defeats the purpose of the scheme. "Though the urban population is increasing and almost 50 percent people live in urban areas, most cannot afford to buy a house only because of the artificial hike in prices. In Mumbai less than 2 percent can afford to buy a house. If the government is permitting keeping the prices at par with market rate then it would in effect deny the urban poor and middle class the right to affordable housing. The PMAY scheme is meant for the poor and affordability is key of the scheme. Such hike without proper reasoning defeats the purpose of the scheme. More so because the builders are being given huge economic benefits including tax exemptions," he said. ________________________________________________________________
Newspaper/Online ET Realty ( online )
Date December 09, 2020
https://realty.economictimes.indiatimes.com/news/allied-
Link industries/myre-capital-raises-rs-100-crore-in-pre-launch-
funds/79636786
MYRE capital raises Rs 100 crore in pre-launch funds
In the current scenario, fractional real estate investment is a new and safe way to invest in
commercial real estate as they command higher rentals and attract large Indian and MNC
tenants.
MYRE capital, a venture by architect firm Morphogenesis, has raised Rs 100 crore in pre-launch
funds and is in the final stages to acquire grade A commercial real estate assets in Mumbai, Pune,
Bengaluru and Delhi-NCR to offer these for fractional investment.
The company intends to further raise and invest Rs 500 crore by March 2021 and is in process of
finalising assets in central business districts of NCR, Mumbai and Pune.
“Since each asset is acquired and stabilised prior to on-boarding fractional owners – fractional
owners will start earning monthly rental from the day of their investment,” said Aryaman Vir,
founder and CEO, MYRE capital.
Commercial real estate has been the preferred asset class for institutional investors and HNI’s due
to a stable rental income (8-10% yields) and appreciation potential (17%-25% IRR).
“There will be around 100-150 investors in one asset and each acquiring would be in the range
of Rs 25 crore,” Vir said.
Among the properties finalised by the company, one is in Mumbai, two are Pune, three in NCR
and one is in Bengaluru.
As fractional real estate investing gains momentum during the Covid-19 pandemic, the tech-based
real estate investment platforms promoting the concept are set to raise additional funds to invest
in multiple grade A commercial assets across Mumbai, NCR and Bengaluru.
“Since we are targeting retail investors, we feel it is crucial to be completely transparent about
potential earnings. This allows investors to get a true understanding of their potential earnings,”
Vir said.
The company shares all post fees, post expenses and post tax figures.
MYRE capital said that rent paying commercial property is curated from across India, then they
are acquired and only after that does the company look for investors.
“The promoters will continue to have investments in each asset after completing the plannedfractionation, thus the promoters will continue to have ‘skin in the game’ assuring the investors of highest quality services in selection of property, it’s management and the exit,” he said. In the current scenario, fractional real estate investment is a new and safe way to invest in commercial real estate as they command higher rentals and attract large Indian and MNC tenants. ________________________________________________________________
Newspaper/Online ET Realty ( online )
Date December 08, 2020
https://realty.economictimes.indiatimes.com/news/residential/andhra-
Link pradesh-cm-directs-officials-to-commence-housing-for-all-project-
from-dec-25/79619202
Andhra Pradesh CM directs officials to commence 'Housing for
All' project from Dec 25
Jagan, who reviewed the preparedness of the house sites distribution programme with
ministers and senior officials at his camp office on Monday, asked officials to keep in mind
that they were not constructing mere houses but several thousand villages.
Chief minister Y S Jagan Mohan Reddy has directed officials to commence the construction of
houses under ‘Nava Rathnalu — Housing for All’ project from December 25, immediately after
the distribution of house sites.
Jagan, who reviewed the preparedness of the house sites distribution programme with ministers
and senior officials at his camp office on Monday, asked officials to keep in mind that they were
not constructing mere houses but several thousand villages.
The ground breaking ceremonies in the upcoming housing colonies should be held for a fortnight
— from December 25 to January 7 — across the state, the chief minister said, while asking
officials to get ready to launch the construction of 15.6 lakh houses in one go. “There should be
three options to construct houses for the poor. The government would take full responsibility of
construction cost if beneficiaries are willing,” he said.
Officials should allow beneficiaries to construct their houses by providing material and wage
component, he added. “The beneficiaries would also be allowed to purchase the material on their
own by giving them the cost of material as per standard prices. We should be open to all three
options. The beneficiary should be allowed the freedom to make the choice,” the chief minister
directed.
Jagan said the government will distribute house sites worth Rs 23,535 crore as they have acquired
nearly 68,361 acres for the house sites scheme. He directed officials to hand over a letter to
beneficiaries where they could not distribute the house sites due to legal complications. “The
beneficiaries should be assured in the letter that they would be given the house site soon after the
resolution of cases,” he said, and also asked officials to ensure that all pending cases in the courts
should be resolved at the earliest.
The government plans to construct around 28.3 lakh houses in the next three years, starting with
8,914 houses in each assembly segment in the first phase. In the second phase of the programme,
12.7 lakh houses would be launched. “The government will spend Rs 482 crore to provide
additional incentive to TIDCO houses of 365 sq ft and 430 sq ft. All houses of 300 sq ft would
be registered in the name of beneficiaries for which they need to pay just Rs 1,” the CM said.Ministers Dharmana Krishnadas, Botcha Satyanarayana, Ch Ranganatha Raju and chief secretary Nilam Sawhney were also present at the review meeting. ________________________________________________________________
Newspaper/Online ET Realty ( online )
Date December 08, 2020
https://realty.economictimes.indiatimes.com/news/industry/centre-and-
Link rajasthan-government-delay-release-of-funds-for-pmay-
gramin/79622883
Centre and Rajasthan government delay release of funds for
PMAY-Gramin
The Centre has paid Rs 658.40 crore under first instalment so far. Moreover, the
presentation pointed out that from state’s share not a single rupee has been released for the
scheme so far.
In a presentation, given to chief secretary Niranjan Arya by rural development department last
week, it came to light that of the total funds required, Rs 3119.80 crore, from the Centre’s share
under Pradhan Mantri Awas Yojana-Grameen (PMAY-G) for 2020-21 target, the Centre has not
even paid half the amount for first instalment, which is Rs 1328.2 crore.
The Centre has paid Rs 658.40 crore under first instalment so far. Moreover, the presentation
pointed out that from state’s share not a single rupee has been released for the scheme so far.
However, additional chief secretary (ACS) rural development and panchayati raj department,
Rohit Kumar Singh said around Rs 198 crore from state’s share was released last week.
The state’s total share of funds for target set under PMAY-G is Rs 2079.87 crore. Therefore,
including the centre’s share (Rs 3119.80 crore), total funds required for 2020-21 is Rs 5199.67
crore. For the first instalment, the Centre is supposed to pay remaining Rs 669.80 crore.
For 2020-21, against the total target of 4.43 lakh, 1.92 lakh houses have been sanctioned so far
and only 9289 houses have been built so far.
Singh said, “Last week we received some money. Around Rs 198 crore was released (by the state)
about three-four days ago. But, the programme is almost getting over. The number of NOLBs
(No One Left Behind) is very few in numbers in the state. We must, in fact, search for those left
out. People usually migrate to other states along with their cattle.”
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