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Indian Real Estate News

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  • Re : Indian Real Estate News

    CREDAI officials want regulators for cement and steel sectors

    They also said the possibility of importing cement should be looked at as the rise in the prices of construction inputs is squeezing out their margins and may have to be passed on to the customers.
    CHENNAI: Citing the runaway prices of steel and cement, real estate developers are hoping that the central government set up a regulator for these two sectors, said top officials of Confederation of Real Estate Developers' Association of India (CREDAI).

    They also said the possibility of importing cement should be looked at as the rise in the prices of construction inputs is squeezing out their margins and may have to be passed on to the customers.

    Speaking to media after releasing the national survey of Covid-19 impact on real estate sector Pankaj Goel, Secretary said the price hike in steel may be due to shortage in supplies as the plants are focused on producing oxygen for Covid-19 patients.

    The Competition Commission of India (CCI) had levied a penalty of about Rs 6,000 crore on the cement companies earlier for cartelisation and the matter is under appeal, Goel said.

    The cement prices have gone up by 20 per cent and the steel prices by about 40 per cent in recent times, officials said.

    On the question of having a regulator for steel and cement Goel hoped that it would become a reality soon.

    CREDAI officials said imports of cement may be difficult given the clout that the cement manufacturers have.

    The CREDAI has represented to the government to infuse financial stimulus and initiate progressive measures to assist the sector's recovery.

    The organisation has requested for liquidity infusion, one-time restructuring of loans, across the board six months extension of completion date by RERA, stamp duty reduction or waiver, moratorium extension on principal and interest for six months and others, Harsh Vardhan Patodia, President, CREDAI said.

    The survey report was made with the participation of 4,813 developers from 217 cities and is the latest ground report on which the government should base its decisions, officials said.

    According to the survey report, over 95 per cent developers feel inevitable project delays if no urgent relief measures are injected in the sector by the Government and the Reserve Bank of India (RBI).

    These delays are attributed to a range of factors, like labour shortage at construction sites and project approval delays.

    As per the survey, 98 per cent of the developers are facing reduced customer enquiries and 42 per cent developers are experiencing a 75 per cent decline in customer enquiries.

    Furthermore, the report reveals that the second wave has caused 95 per cent of customers to postpone their purchase decisions.











    CREDAI: CREDAI officials want regulators for cement and steel sectors, Real Estate News, ET RealEstate (indiatimes.com)
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    • Re : Indian Real Estate News

      CBI books Avantha Realty, Gautam Thapar in Yes Bank fraud case

      ​The CBI officials said that the agency sleuths were also carrying out searches at 14 locations including at Delhi NCR, Lucknow, Secunderabad and Kolkata which has led to the recovery of incriminating documents and digital evidence.
      NEW DELHI: The Central Bureau of Investigation (CBI) has filed a case against industrialist Gautam Thapar of Avantha Realty and Oyster Buildwell Pvt Ltd among several others for allegedly cheating Yes Bank to the tune of Rs 466 crore.

      The CBI officials said that the agency sleuths were also carrying out searches at 14 locations including at Delhi NCR, Lucknow, Secunderabad and Kolkata which has led to the recovery of incriminating documents and digital evidence.

      A CBI official said that the agency has filed a case against Thapar, Avantha Realty Limited, Oyster Buildwell Pvt Ltd, Raghubir Kumar Sharma, Rajendra Kumar Mangal, Tapsi Mahajan unknown officials of Jhabua Power Investment Limited, unknown officials of Jhabua Power Limited, unknown officials of Avantha Holdings Limited, unknown officials of Avantha Power and Infrastructure Limited and unknown public servants and private persons for the Yes Bank fraud. The CBI registered a case on June 1 this year on the complaint of Yes Bank.

      The official said that it was alleged that the private company based at Gurugram and Delhi had availed a term loan facility of Rs 515 crore from Yes Bank Limited in December, 2017.

      The loan amount was declared as NPA on October 30, 2019. Further, the borrower was allegedly declared a 'Red Flagged Account' on March 6, 2020 on the basis of Early Warning Signals, he said.

      The complaint alleged criminal breach of trust, cheating, criminal conspiracy and forgery for diversion or misappropriation of the public money during the period from 2017 to 2019, thereby causing a loss of Rs 466.5 crore to Yes Bank.

      In March last year, the CBI had booked Yes Bank founder Rana Kapoor and his wife Bindu Kapoor for purchase of a marquee property in Delhi's prestigious Amrita Shergill Marg from its owner Avantha Realty promoter Gautam Thapar.

      The CBI in its FIR alleged that Kapoor obtained illegal gratification in the form of a property in a prime location in New Delhi at much less than the realisable market value belonging to Avantha Realty Limited (ARL), for a loan taken by it from Yes Bank for extending concessions in the already existing credits provided to the Avantha Group and for advancing additional loans.

      The CBI further alleged that Kapoor, his wife Bindu, also a director of Bliss Abode Private Limited (BAPL) and Thapar, promoter of Avantha Group companies, entered into a criminal conspiracy for the purpose of obtaining the "illegal gratification".

      The CBI FIR said that Kapoor bought the prime bungalow for Rs 378 crore, paying through BAPL, and the property was immediately mortgaged to Indiabulls Housing Finance Limited for a loan of Rs 685 crore -- which was Rs 307 cr less than the market price.









      CBI books Avantha Realty, Gautam Thapar in Yes Bank fraud case, Real Estate News, ET RealEstate (indiatimes.com)
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      • Re : Indian Real Estate News

        Model tenancy act will help formalise Indian rental market: ICRA

        The act attempts to address some of the key conflicting issues between the parties by bringing about certain important changes, including the establishment of a rent authority and the mandatory requirement for a written rent agreement; and registration of the same with the authority.
        NEW DELHI: The successful roll-out of the Model Tenancy Act (MTA) is expected to have a positive impact on market functioning by creating a balanced legal framework, which would improve transparency and protect the interests of all key stakeholders, according to ICRA.

        Union Cabinet approved the model tenancy act last week replacing the Rent Control Act, 1958. The act aims at bringing about a balance of interests between tenants and landlords.

        Till now, the rental market has remained largely underdeveloped, despite the presence of vacant units in urban areas as well as the existence of a considerable housing shortage, primarily due to trust issues between landlords and tenants, low rental yields and lengthy dispute resolution mechanisms.

        The act attempts to address some of the key conflicting issues between the parties by bringing about certain important changes, including the establishment of a rent authority and the mandatory requirement for a written rent agreement; and registration of the same with the authority.

        Moreover, it also provides clarification on the premise and process for eviction of tenants, maximum level of security deposit, rent revision and requires the establishment of rent courts for dispute resolution.

        Mahi Agarwal, sector head & assistant vice president at ICRA said, "With the MTA in place now, housing stock can be used more efficiently, which would, in turn, support greater formalization and institutional of the sector over the medium-to-long term. The consequent development of new business models would aid improvement in return metrics. However, effective and broad-based implementation of the act, along with continued Government support and initiatives aimed at reforming the rental market would remain key."

        On the one hand, India has a large vacant housing stock of over 110 lakh units and on the other, it has a huge housing shortage. One of the key reasons behind this paradox is the low rental yield in the country, which is one of the lowest across global markets. While here rental yields stand at 2-3%, the same in some key markets can go as high as 7-8%.

        Moreover, with the high taxation of 30% in India, the net benefit from rental income is low, especially when compared to housing finance costs of around 7-8%. While capital appreciation used to cover this gap earlier, such appreciation has been muted over the last few years, thereby making the gap between rental yields and interest costs more detrimental. Thus, in order for the rental market to develop, returns would need to increase.

        Other issues that have impacted the development of the Indian rental market include the high age and poor maintenance of the vacant stock. Given these concerns, the implementation of the MTA as an effective rental housing framework, with it clearly spelling out the obligations of landlords and tenants with regards to property maintenance and upkeep, would be a crucial step towards aiding the development of the Indian rental market.

        "While the MTA is a move in the right direction, considerable challenges in implementation may arise from land and provision of housing being state subjects, with local governments having the right to modify rules at the state level. The extent of adoption by state governments would remain a critical factor in determining the overall efficacy of the act. Moreover, with the act being applicable on prospective basis, existing landlords and tenants would not see a near-term benefit in terms of resolution of key tenancy issues," concluded Agarwal.












        Model Tenancy Act: Model tenancy act will help formalise Indian rental market: ICRA, Real Estate News, ET RealEstate (indiatimes.com)
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        • Re : Indian Real Estate News

          IWG forecasts profit in 2021 will be well below crisis-hit 2020

          IWG and its rivals have to some extent pinned their hopes on offering work spaces that would align with a permanent shift to a flexible working model, dividing week days between the office and home.
          BENGALURU: Office space provider IWG warned on Monday that its 2021 core earnings will be well below last year's crisis-hit level as continuing curbs in some markets and new COVID-19 variants derail recovery, sending its shares as much as 16% lower.

          The grim forecast in an unscheduled trading update underlines the challenges facing an industry that has seen occupancy levels plummet as a shift to remote working during the health crisis emptied out many office buildings.

          Shares in the Regus owner were 15% lower at 310 pence by 0741 GMT, heading for their worst one-day drop since March last year.

          IWG and its rivals have to some extent pinned their hopes on offering work spaces that would align with a permanent shift to a flexible working model, dividing week days between the office and home.

          IWG, which has already signed deals with companies including bank Standard Chartered for hybrid working services, said on Monday it was making good progress on larger master franchise agreements, with several in the final stages of talks.

          For 2020, IWG suffered a 17% slide in adjusted core earnings and took COVID-19 costs of 389.8 million pounds ($550.24 million).

          Rival Workspace has warned that a recovery to pre-pandemic levels will take a couple of years.

          "For it (underlying core profit) to be 'well below' is remarkable, when Q1 commentary was upbeat, occupancy troughed in February and price was supposed to be moving up," Peel Hunt analysts wrote.

          "There is no question that this is disappointing."

          IWG said it still expects a strong recovery in 2022, adding it has continued to see "unprecedented demand" for its hybrid work options.

          The company said occupancy was improving in markets where pandemic curbs were easing, including the United States, while enquiries touched pre-crisis levels.

          Softbank-backed office-sharing startup WeWork, which posted a first-quarter loss of more than $2 billion as it prepares to go public, also said last month it was starting to see signs of a recovery as more people returned to the office.










          Regus: IWG forecasts profit in 2021 will be well below crisis-hit 2020, Real Estate News, ET RealEstate (indiatimes.com)
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          • Re : Indian Real Estate News

            Work-from-home trend may significantly damage office space market: Ind-Ra

            The agency said this can result in over 500 basis points increase in vacancy levels over FY21 to FY23. "The impact on upcoming office space providers is likely to be particularly sharp as these may struggle to let out their upcoming properties."
            • ANI
            • June 05, 2021, 14:05 IST

            MUMBAI: Negative demand created by the work-from-home culture along with reduction in fresh leasing activities due to a weaker economy can easily shave 40 per cent off annual demand over the next few years, according to India Ratings and Research (Ind-Ra).

            The agency said this can result in over 500 basis points increase in vacancy levels over FY21 to FY23. "The impact on upcoming office space providers is likely to be particularly sharp as these may struggle to let out their upcoming properties."

            Nearly 83 per cent of employees surveyed recently by Accenture favoured a hybrid work model with the ability to work remotely 25 to 75 per cent of time.

            Ind-Ra said such a transition to working remotely can seriously hamper office real estate demand as it may allow companies to use a hot desking policy where the same desk may be shared by a number of employees who report to work on different days.

            If 2.5 per cent of overall employees are asked to report to work on alternate days and use the hot desking policy, it may result in a net 1.25 per cent reduction in office space required in a country.

            On a base of 635 million square feet of office space occupied in top eight cities of India at FYE20, said Ind-Ra, it will result in a negative demand of 7.9 million square feet which is 21 per cent of the average annual demand seen during FY19 to FY20.

            "A larger impact of hot desking might shave off several years' of demand in the short run and create significant hardships for office real estate providers."

            Besides, a number of international companies have announced hybrid work models where the employees will need to report to office only on a few days of the week. Ind-ra said it can be easy to infer that the space that may be subject to hot desking model may be a lot more than 2.5 per cent as envisaged.

            Ind-Ra said occupancy at a large real estate investment trust (REIT) focusing on office portfolio declined to 86.8 per cent in 4Q FY21 from 92.2 per cent in 1Q FY21.

            Occupancy at another listed REIT declined to 81.8 per cent in 4Q FY21 from 87.1 per cent in 2Q FY21. Occupancies at other listed REITs and companies also declined by around 500 basis points over the last four quarters, said Ind-Ra.
















            Work-from-home trend may significantly damage office space market: Ind-Ra, Real Estate News, ET RealEstate (indiatimes.com)

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