New Delhi: Private equity investment in real estate rose 26% in the first half of this year to nearly ₹28,000 crore ($3.9 billion) driven by higher inflow in commercial and warehousing projects, according to property consultant Colliers.

Private equity (PE) inflows from foreign investors increased 28% during the first six months of the 2019 calendar year.

"During the first six months of 2019, the real estate sector witnessed private-equity (PE) inflows of $3.9 billion ( ₹27,767 crore), eclipsing the first halves of previous years," Colliers International said in a report.

The increase in PE inflow signals rising confidence of institutional investors in India's premium office spaces, retail properties and warehousing sector, it said.

"Foreign funds remain active in the real estate market, with inflows from such investors rising 28% in H1 2019. While foreign funds continue to be active in the commercial office space, they are also investing into the logistics sector," the report said.

"The sector is at an inflection given the 3Rs - Reforms, REITs, and Results of the recently concluded elections. The year 2019 will see the bulls at play, with phenomenal capital influx in the office and logistics space," said Suresh Castellino, Executive National Director, Capital Markets & Investment Services at Colliers International India.

Mumbai attracted maximum (27%) of the total PE inflows, garnering around $1.05 billion of investments.

Pune saw 10-fold increase in PE inflow to $237 million in January-June period of this year.

During the first six months of the year, investments in commercial office assets accounted for 42% share of total investments. Investors pumped in $1.2 billion into the retail sector, accounting for 31% share.

"We foresee the current year to create a new record for investments in real estate, with investors viewing retail and logistics assets favourably in addition to commercial office assets," said Megha Maan, Senior Associate Director, Research at Colliers International India.

Mumbai: India’s first ever real estate investment trust has outperformed peers since its debut in late March, helped by a low interest rate environment that’s forcing investors to look elsewhere for yield.

Blackstone Group LP-backed Embassy Office Parks REIT has risen 21% since its listing, beating indexes that track REITs in Singapore and Japan.

“This kind of return isn’t usual from a REIT," said K.V. S Manian, an executive director at Kotak Mahindra Bank Ltd. “A large part has to do with the benign interest rate environment in India now."

Interest rates in India are on a downward trajectory after the central bank cut borrowing costs three times since January. Economists say further easing is expected. REITs offer a fixed return from a pool of rent-yielding assets, along with the prospect of capital appreciation.

Embassy operates around 33 million square feet of office space and has marquee tenants including Microsoft Corp. and Rolls-Royce Holdings Plc. The REIT should see compound annual growth in rental income of around 16% through 2023, analysts at Kotak Securities Ltd. wrote in a report last month.

Sobha has emerged as the ‘Brand Leader of Indian real estate’ for the 5th consecutive year, with Embassy very close behind at 2nd, according to Track2Realty’s BrandXReport 2018-19, with five of the top 10 brands from Bengaluru.

Sobha Limited has been recognised as the Top National Realty Brand across asset class in India, by Track2Realty’s BrandXReport 2018-19. This is the 5th consecutive year that Sobha has been conferred with the National Brand Leadership of Indian real estate. Embassy has jumped from its last fiscal ranking at number 5 to number 2 now, with a brand score of just 0.4 behind Sobha. Godrej Properties has retained its brand rank as 3rd-best brand at the national level. Bengaluru-based Prestige Group not only loses its 2nd ranking to Embassy but drops two places to number 4 this fiscal. K Raheja Corp jumped from 8th position to 5th position.

Brigade Group was at the 6th position from its previous rank at 9. Mumbai-based Oberoi Realty and Piramal Realty were at 8th and 10th places, respectively. Piramal Realty entered the elite list of brand leaders for the first time. DLF Limited was the only brand from north India to figure among the top 10 national brands, at 7th place. The biggest loss of brand equity at the national level was with Puravankara Limited, which dropped to number 9 this year, after remaining at number 4 in the previous two consecutive years. Lodha Group went out of the list of top 10 national brands, in the wake of consumer complaints. Adani Realty was also very close to the top 10 national brands this fiscal year but could not make it.

The comprehensive Brand Perception Audit Report recognised Sobha as the top national realty brand, top brand in south India, top brand in residential space, top brand in super luxury segment and its compact luxury sub-brand Sobha Dream Series as the top brand in affordable homes. Speaking on the occasion, Ravi Menon, chairman of Sobha Limited said, “We are delighted to be recognised as the top brand nationally by Track2Realty – BrandXReport for the 5th consecutive year. Over the last five years, we have been continuously improving our brand leadership score and consolidating our position. It is a rare achievement. There is still a lot to do and we are committed to taking right steps in that direction.” JC Sharma, vice-chairman and managing director of Sobha Limited added: “While the market continues to face tough conditions due to liquidity issues, Sobha has been able to improve its performance significantly. Our ability to maintain the leadership position in any given situation, exhibits our solid foundation and resilience. It is this quality that has helped us become one of the most admired brands in the Indian real estate sector.”

Who would have thought that real estate stocks would lead returns in 2019. Nearly halfway into the year, the Nifty Realty index delivered returns of 19%, making it the biggest gainer among NSE’s sectoral indices this calendar year. The Nifty 500 index, in comparison, has risen about 6% so far this year.

In fact, most investors did not pencil the real estate sector as having a good year. The liquidity crunch post-September 2018 was expected to dash the chances of recovery. But the sector has shown resilience, thanks to the Real Estate (Regulation and Development) Act (RERA) that has helped larger real estate firms.

The once unorganized real estate sector is now getting legitimacy, with organized developers launching more properties under the legislation. In fact, new launches under RERA have seen a sharp rise, leading to a strong increase in sales volumes.

“Sales growth for the coverage universe was 38% YoY in 4QFY19 at ₹5,800 crore in 4QFY19...Strong improvement in pre-sales was evident across all geographies, while the decline in realizations was largely due to the increased contribution of lower-ticket housing in overall sales volumes," says Kotak Institutional Equities in a note to clients.

Sales volume in FY19 increased 7% over the previous year to 443 million sq. ft, point out analysts at Kotak. This, coupled with a decline in new launches, has been helpful in cutting back inventory.

“Declining launches and improving sales momentum have continued to aid draw-down of inventory, with all-India inventory declining 11% YoY to ~1.23 bn sq. ft from 1.4 bn sq. ft in March 2019," notes Kotak.

Further, the latest cut in the repo rate, which has resulted in a cumulative decline of 75 basis points since August 2018, is expected to bring relief to the sector. Of course, with some housing finance companies still under the weather, problems related to the liquidity crisis are still pinching. But things are clearly better compared to a few months ago.

It is also worth noting that some of the stocks in the Nifty Realty index are up considerably this year. This has driven up their valuations and made them a tad more expensive. Returns of the Godrej Properties Ltd stock stand at around 41.1% in 2019. Sunteck Realty Ltd, too, gained 36.81% in 2019. So, from that perspective, investors must watch their steps while investing in these stocks.

NEW DELHI: The National Consumer Disputes Redressal Commission has asked real estate giant Unitech to refund over₹53 lakh to two home buyers for failing to hand over the possession of an apartment.

The apex consumer commission asked the company to refund within three months ₹53,73,561 and give a compensation of simple interest at 10 per cent per annum to Gurgaon residents Abhishek and Mani Agarwal for a delay of over seven years in handing over the possession of the apartment.

"Refund the entire principal amount of ₹53,73,561 to the complainants along with compensation in the form of simple interest at 10 per cent per annum with effect from the date of each payment till the date of full refund," Presiding Member of the Commission Justice V K Jain said.

The Commission also asked the firm to pay ₹25,000 as litigation cost to the home buyers.

The Agarwals had booked a residential apartment with Unitech Reliable Projects Limited in a project namely 'Capella' in Uniworld City, which was to be developed in Greater Noida.

According to the allotment letter, the apartment was to be delivered to them by November 30, 2011.

However, their allotment was shifted to another project, namely, 'Unitech Verve', the possession of which was to be delivered within 15 months, that is, June 29, 2012.

Though the real estate giant assured the home buyers of the possession of the apartment, the Agarwals failed to get their house even after a lapse of more than seven years after which they filed a complaint.

Ankit Khandelwal and his wife Sonali, both 34, wanted to get their financial life on track for a very long time but didn’t know whom to consult or how to go about it. About five months ago, they met Shweta Jain and Nithin Sasikumar, who are the co-founders of Investography, a Bengaluru-based financial planning firm, thanks to a financial literacy workshop that was held at Ankit’s office. “Earlier our investment planning was not structured and we were not sure about where we must invest our money," said Ankit, a finance professional.

One misconception which the couple had was that you need a large amount of money to start investing but Jain explained to them why that wasn’t true. “Middle-aged individuals’ investments should be targeted towards their goals, growth for the long term and liquidity and safety in the short term," said Jain.

Sonali and Ankit were initially hesitant about exploring investment options other than Employees’ Provident Fund (EPF) and real estate. Ankit said their investments were not planned through and the little that was invested was done only to get some tax benefits.

Once they started working with a planner, they figured out how investment options such as mutual funds could help their money grow better. Getting the couple to start saving was not the real challenge but increasing savings to match their requirements was hard. However, five months into the financial plan, they’re now saving about 25% of their total income. What most of us don’t realise is that one of the biggest leaks is the money we spend on shopping. “We had to help them get things in order. While the couple did mention what they saved, the numbers were not matching up to what they should have actually saved," said Jain. the mismatch was because of the unaccounted expenses.

Sonali and Ankit have their long-, medium- and short-term goals chalked out. Their priority is to ensure that their one-and a-half-year-old son Tiyansh gets the best education and they’ve already started putting aside money to meet this goal. They also wish to buy a house of their own in the next five years which is their medium-term goal. Planning for retirement and having a contingency fund are other goals. The couple has started regular investment in equities to meet their long-term goals. For other goals, they have a significant debt exposure.

“We should have started earlier and planned well. But now we are carefully selecting our investment avenues based on our needs. Better late than never," said Sonali, a marketing and sales professional.

Jain said most people tend to take decisions such as buying a house or going on vacations without really considering what impact it could have on their other goals. “It is worthwhile to figure out what is important to you and the implications your money decisions could have on your future goals," said the financial planner.

Their son and Ankit’s parents are financially dependant on the couple. In terms of money lessons, the couple said they’ve learnt a lot. Starting early was their biggest takeaway and this is one thing they’d like to pass on to their son as well. “Another thing I learnt was that it doesn’t matter whether you start with a small amount or a big amount. Saving in whatever quantity is okay and investing the same will only help your money grow," said Ankit.

Having a financial plan is very important. Jain said it is the foundation and if you don’t have a foundation, how successful and tall a building can you build? Most people end up spending a lot in their early years and regret it only much later. “Putting a plan in place and saving for the goals gives a person focus and clarity which is important. A financial plan is like Google Maps, it shows you various routes to get to your destination—you can choose which one serves you the best," said Jain.

In the recent past, several developers have avoided mentioning the possession date in the agreement. We look at what home buyers can do, under RERA, in such cases, and recent judgements in favour of home buyers.

There have been cases galore, where home buyers have faced delays in getting the possession of their flats. In many cases, the delays have been for more than five to six years. Some developers have even gone to the extent of not mentioning the date of possession in the agreement, leading to mental and financial trauma for the home buyers.

While taking a serious note of the issue, the Maharashtra Real Estate Regulatory Authority (MahaRERA), in a recent judgement, directed Skyline Construction Company to refund Rs 1.06 crores, along with an interest of 10.55 per cent to actor Vrajesh Hirjee, for failing to hand over possession and keeping the date of possession clause empty in the registered agreement. The Authority also asked the builder to refund tax deducted at source (TDS) and stamp duty paid by Hirjee. In another case, Aparna Singh, who had purchased a flat in a residential project in Thane, was not able to claim interest relief under Section 18 of the Real Estate (Regulation and Development) Act (RERA) rules, due to the absence of the possession date in the sale agreement. In her case, the RERA tribunal ordered the developer to pay interest to her, even though the date was not mentioned in the agreement.

MUMBAI: Demand for commercial real estate, led by sustained occupiers’ interest to expand businesses in India, is pushing prime office rentals in main cities such as Mumbai, New Delhi and Bengaluru upwards.

During the first quarter, prime office rentals in Bengaluru, Mumbai and Delhi rose 17%, 5% and 1.4%, respectively, from a year ago. The growth has made New Delhi’s Connaught Place the fourth-most expensive office market in the Asia-Pacific region, showed data from Knight Frank. 

Connaught Place recorded gross effective monthly rents of $82.5 per sq metre (Rs 330 per sq ft) that stacked up just behind Hong Kong, Tokyo and Singapore. Mumbai’s Bandra-Kurla Complex (BKC), with effective monthly rents of $75.1 per sq metre (Rs 300 per sq ft), was the seventh-most expensive office location. 

“The office space demand witnessed record growth in 2018 with over 47 million square feet (msf) of leasing, while new office space supply rose 13% in the same period. Prime office markets are already operating with very low vacancy, which is slowing down new transactions. Strong demand trends have put upward pressure on rentals, especially in prime markets, a trend that is expected to continue,” said Shishir Baijal, CMD of Knight Frank India.

Knight Frank’s Asia-Pacific Prime Office Rental Index for the first quarter of 2019 recorded a decline of 0.4% sequential growth in rentals, though it remained up 6.2% year-on-year basis. The sequential decline in the index was attributed to continued heightened global uncertainties led by re-escalation of US-China trade tension, Brexit and various major elections across the region.

Dubai: The UAE's recently-launched permanent residency scheme could be a game changer and provide a fillip to the real estate market by encouraging expatriates to invest in property and settle in the Gulf nation, industry experts said.

The United Arab Emirates last week launched a permanent residency scheme to woo wealthy individuals and exceptional talents, a move that could attract more Indian professionalsand businessmen to the country.

The "Gold Card" programme unveiled by UAE Prime Minister Sheikh Mohammed bin Rashid Al-Maktoum is open to investors and "exceptional talents" such as doctors, engineers, scientists, students and artists.

Sameer Barakat, Executive Director at Provis, a real estate and property management company in UAE, said the permanent residency scheme is a significant step towards realizing the economic diversification and sustainable development goals of the country.

“This initiative further positions the UAE as an innovative destination for business leaders, providing millions of people with high-quality opportunities in a tolerant, safe and productive environment," he said.

Lewis Allsopp, CEO of Allsopp & Allsopp, Dubai estate agents, said this is a huge milestone for the UAE and for the Dubai property market.

“Over the last few years, we have seen continual steps to enhance the property market and to add longevity to the UAE with five-year retirement visas, long-term visas and ten-year visas," he said.

“Most expats have a money-making mindset when they move to Dubai with a short-term plan. The UAE Cabinet's decision to enforce a Gold Card for permanent residency, now allows expats to look at Dubai as a home rather than a temporary plan," he added.

The permanent residency is a good step forward and likely to boost the fortunes of its property market, a statement from the Property Finder said.

It said that around 6,800 people have been granted permanent residency and a ‘Gold Card’ in the first round of applications.

“This is a game changer for the real estate industry in Dubai. We are yet to get full details of the Gold Card program, such as who can qualify, the terms, etc. However, it's definitely a step in the right direction and very much needed to stimulate investment," Lynnette Abad, Director of Research and Data, Property Finder, said.

Currently, short-term visas linked to employment hold back expatriates from investing and owning real estate in the UAE. They prefer to remit savings to their home countries instead. The Gold Card scheme will encourage expats to make long-term investment goals, including owning a property.

The UAE already offers long-term visas valid for five to 10 years to property investors, entrepreneurs and people with exceptional talents without the need for a local sponsor.

A minimum investment of AED 5 million (USD 13,61,225) is needed to obtain a five-year visa, and double that amount is necessary for a decade-long visa.

“Initiatives and new regulations like these are expected to have a positive impact on the real estate market in Dubai. The more the government offers to entice talent and companies, the easier it will be for them to settle here and call Dubai home. Then, the investment should follow suit," Abad said.

The Indian expatriate community is reportedly the largest ethnic community in the UAE, constituting roughly about 30 per cent of the country's population of around nine million.

A preliminary probe into the fire in Surat, at a coaching class, which killed 22 students shows several lapses by the builder and local municipality officials.

A preliminary probe into the causes of the devastating fire in Surat at a coaching class, which claimed the lives of 22 students last week, has highlighted various lapses on the part of officials of the local municipal corporation as well as the builders. The probe also found that the structure where the coaching class was operated was prone to fire incidents. It had low ceilings, and tyres were used for sitting in place of chairs.

The builders had hidden the fact that they had added a fourth floor to the three-storey Takshashila Complex while seeking regularisation of the structure in 2013 by paying ‘impact fee.’ According to a top bureaucrat, the officials concerned did not conduct a physical inspection of the building before approving the proposal of the builder. The fire was triggered by a spark in the compressor of the air-conditioner fixed between the first and second floors of the Takshashila Complex and spread through a vertical display panel to the top floor with a dome structure where the coaching centre was located, as per a preliminary report submitted by Urban Development Department principal secretary Mukesh Puri, to the state government. He said access to an RCC staircase connecting the fourth floor to the lower floor was blocked due to which the students could not escape out of the building. “Another escape route through an iron staircase could not be accessed due to the fire,” he said.

Puri said three officials have been suspended for various lapses. They are identified as SK Acharya and Krti Mod, both with the fire department in Surat Municipal Corporation, and deputy engineer VK Parmar. Chief minister Vijay Rupani had directed Puri to conduct an inquiry and submit a report in three days. “In 2013, four owners of the complex had applied for the regularisation of the structure by paying an impact fee. Their application was approved in 2015. It is learned now that they had applied for approval of a building with only three floors, and with no mention of a fourth floor. The responsible engineer did not conduct a physical inspection of the building. Declaration by the builders was false and approval by the engineers was wrong. Officials who carried out the survey for the impact fee for the building and approved it without conducting physical verification are also responsible,” Puri stated.

“The builders or the tenants using such a structure like the one on the fourth floor of the building are also responsible. Also, there is a big lapse on the part of the person who blocked access to the RCC staircase,” he said. Puri also said that certain fire department officials were also responsible as they did not carry out a survey of the building even after they were directed to do so in the wake of a similar incident in a tuition class in the city’s Vesu area, in November last year. Two persons were killed in that incident. The structure where the coaching class operated was prone to fire incidents, with low ceilings, tyres for sitting in place of chairs, and an iron staircase attached to it placed on a wooden structure which collapsed. Puri said the smoke caused due to the blaze could not escape as the structure had no ventilator.

As per the report, as many as 918 sensitive establishments were surveyed and 450 have been asked to comply while 39 properties have been sealed. “Fire officials were supposed to carry out the survey. How the building remained to be surveyed is a big lapse,” he said. Puri also said there were three teachers in the coaching centre at the time of the incident. While one of them died, another received serious head injuries while jumping off the building. The third also sustained injury while escaping but has been arrested.

Puri said the findings are a result of a three-day investigation and a detailed investigation will continue further in the case. He shared that Surat has two vehicles with hydraulic ladders but one of these arrived 45 minutes after the fire erupted and was of not much use. The police have so far arrested three people, namely Harshul Vekaria, Jignesh Paghdal, and Bhargav Butani. While Vekaria is the builder, Paghdal used to handle the overall management of the complex and Butani is the owner of the coaching class.