State of Real Estate -...
Transcript of State of Real Estate -...
Please refer to Disclosures and Disclaimers at the end of the Research Report.
State of Real Estate For the month of June 2014
16 July 2014PhillipCapital (India) Pvt. Ltd.
The month that was‐ NCR (National Capital Region) is where the action is after the new Central Govt. From the largest ever housing scheme to cost audits on Real Estate companies, expect a lot of action in the NCR market. Finally REITS look like a reality (see our October 2013 edition). The key developments which took place in June 2014 – • Delhi Development Authority (DDA) to roll out 'largest‐ever' housing scheme by
July end : DDA will be rolled out for city‐ dwellers by July end, offering over 26,000 flats across various categories. (see pg 5)
• DDA asked for land policy: A parliamentary panel has asked DDA to finalize its land pooling policy and involve the private sector and cooperative group housing societies in meeting the housing needs in Delhi.
• Delhi government orders cost audit for real estate: The government on June 30 ordered maintenance of cost records and audit for real estate companies, hospitals and educational institutions to drive in transparency and keep a check on their costing.
• Land allotment rates and circle rates hiked in parts of NCR‐ Land allotment rates and circle rates hiked in Ghaziabad while Land allotment rates have been hiked in Noida as well.
• Gurgaon to get more electricity ‐ Haryana Urban Development Authority (HUDA) announced on June 17 a budget of Rs 26.9bn to develop the electricity infrastructure in the upcoming sectors.
• Starwood hotels to set up 100 hotels in India: Starwood Hotels & Resorts Worldwide Inc., one of the world’s largest hospitality chains, plans to expand its reach by setting up 100 hotels in India by the end of 2015.
• Karnataka scraps green panel: the Karnataka government has scrapped the State Environmental Clearance Committee (SECC), which was in place for the last 29 years. This will enable the government to approve many small and medium industrial, infrastructure, mining and biotech projects among others without any review of their significant environmental and social impacts. (pg 10)
• Investors ready $1 billion war chest for office assets in India: Foreign private equity funds and pension funds are among investors that over the last 12 months have committed to invest more than $1 billion to buy or build commercial property in India as the government works to finalize rules governing real estate investment trusts ( REITs).
• Only 38 of Mumbai’s 157 infrastructure projects completed CAG: The Comptroller and Auditor General (CAG) of India has, in a strongly worded audit report, rapped the Mumbai Metropolitan Regional Development Authority (MMRDA) and the principal secretary, state urban development department, for completing only 38 out of the city’s proposed 157 infrastructure projects. (pg 2)
• Budget Highlights: Introduction of REITs coupled with relaxation in FDI conditions i.e. reduction in built‐up area requirement from 50000 sq mt to 20,000 sq. mt, and minimum capitalization from $ 10 million to $ 5 million is a step in the right direction and would increase liquidity in the funding of real estate projects. Also, increased disposable income by way of higher standard deduction on income earned, and, higher tax deduction limit on interest on housing loan for self‐occupied property are going to boost short term sentiments. (Pg 18)
Abhishek Ranganathan (+ 9122 6667 9952) [email protected] Neha Garg (+ 9122 6667 9996) [email protected]
16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
Mumbai
• MMRDA gives Rs 5bn boost to Colaba‐Seepz Metro: The MMRDA has sanctioned Rs 5bn for the Colaba‐Bandra‐Seepz Metro corridor in its 2014‐15 budget, thus giving the project a much‐needed fillip. The amount is sufficient to begin initial work. The low allocation for Metro‐II, which has been delayed due to a lack of environmental clearance for a depot, means it will be a non‐starter this financial year as well.
• Kharghar offers maximum new projects in Navi Mumbai: Kharghar, a node city of Navi Mumbai, is witnessing significant residential development. Over 20 new projects are slated to come up in the locality in the next one year. These are under construction and ready‐to‐move‐in units. The large amount of supply in the residential sector is because of increasing demand for property in the area. According to PropIndex (JanuaryMarch 2014), the quarterly India Apartment Index by MagicBricks.com, Kharghar was ranked at the top in the list of the top ten preferred localities of Mumbai in the said quarter.
• Only 38 of city’s 157 infrastructure projects completed CAG: The Comptroller and Auditor General (CAG) of India has, in a strongly worded audit report, rapped the Mumbai Metropolitan Regional Development Authority (MMRDA) and the principal secretary, state urban development department, for completing only 38 out of the city’s proposed 157 infrastructure projects. The total cost of the Mumbai Urban Infrastructure Project (MUIP) was estimated at Rs 26.47bn. Instead the MMRDA spent Rs 37.35bn for 38 works. The MMRDA was conceived as a planning body and the MUIP was the first project which it also executed. The MUIP master plan, prepared by the MMRDA, was approved in November 2003 and was to be completed in 2006. However, work on the ground started only in 2006.
• CIDCO appeals project PAPs in cluster development: City Industrial Development Corporation of Maharashtra Limited (CIDCO) on June 17 appealed project affected persons (PAPs) to participate in the cluster development scheme for a well‐planned, improved and economically beneficial living. CIDCO is willing to extend all possible assistance and can implement the cluster development scheme in a village as a pilot project if the PAPs are willing to participate in the scheme.
• Mumbai Metro services to be extended till Thane: From Ghatkopar, the first metro would be extended to Wadala towards Mumbai, Teen Haat Naka and Kasarwadavli towards Thane to form the metro region’s fourth route. government is expecting a final feasibility report on this route within a month’s time. The detailed report from Rites is expected by August 15.
• Mumbai’s township projects awaiting environment clearance: About 900 residential and industrial township projects in the state of Maharashtra, mostly in Mumbai, awaiting environment clearance may soon get a push. The deputy chief minister on June 2 assured that state would soon take up the legislators’ demand to increase the condition of construction area for environmental clearance from 20,000sq m to beyond to exclude smaller projects from “tricky” clearances, with the Centre.
• Maharashtra drops sea‐links for Mumbai, opts for coastal road: The Maharashtra government has submitted its proposal to the Centre to construct 35 km coastal road between Nariman Point and Kandivli in the western suburb. The project, with about 18 access points along the entire road, entails an investment of Rs 80bn. The government will soon appoint the state run Maharashtra State Road Development Corporation (MSRDC) or the BrihanMumbai Municipal Corporation (BMC) as the nodal agency for the project which will be implemented through a joint venture route.
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• The Mumbai Metro – A real estate game‐changer: Transportation infrastructure economics have historically proven to have a positive impact on real estate values in a city like Mumbai ‐ residential and commercial properties located close to transportation infrastructure tend to command a premium. o Near‐Term Impact: Developers' interest in projects near the Metro has been
increasing since the start of construction. With the commencement of the project, the surrounding region will definitely experience a certain boom in terms of new offerings and price hikes. Rates on both the commercial and residential market will increase, as the properties of northern SBD, BKC and SBD central are the most preferred locations for investors.
o Medium ‐ Term Impact: Intra and inter‐connectivity in SBD North and the Eastern suburbs will increase tremendously, given the capacity of 7 lakh passengers per day added by the Metro. Concurrently, East‐West connectivity will benefit the maximum by this project, which will reduce the burden on JVLR and SCLR (the current East‐West corridors).
Residential Projects ‐ Recent and New Launches in Mumbai Developer Name of the
Project City Location Subvention
scheme Residential/ Commercial
Size (In Sqft) Price/ unit Possession
Paranjape schemes
Royal Court Andheri East Sahar Road Residential 2‐3 BHK Rs 28.0‐36.2mn onwrads
Dec‐14
Paranjape schemes
Prayog C.H.S Ltd. Santacruz (E) Prabhat Colony Residential 2‐2.5‐3 BHK Rs 28.8mn onwards
Paranjape schemes
Snehdeep Goregaon East Off Aarey Road Residential 2 BHK Rs 17.6mn onwards
Paranjape schemes
Vighnarajendra Andheri East Ceaser Road Residential 2.5 BHK Rs 18.0‐19.3mn onwards
Marathon Group Monte Vista Mulund west off L.B.S Marg Residential 2BHk Rs 14.0mn onwards
Ready possession
Marathon Group ERA Lower Parel Lower Parel Residential 2‐3 BHK (1335‐1835 Sqft)
Rs 47.0‐150mn Ready possession
Marathon Group NAGRI NX BADLAPUR (E) BADLAPUR (E) Residential Rs 2mn onwards Nearing Possession
Marathon Group MBRYO Bhandup (W) Residential 1‐2 BHK Rs 6.4mn onwards
Ready possession
Marathon Group Marathone nexzone
Panvel National Highway 4B
Y Residential 2 BHK Rs 6.0mn onwards
Marathon Group Marathone nextown
Dombivli East Kalyan‐Shil road Residential 1‐2 BHK Rs 3.1mn onwards
Hiranandani Estate
Brookhill Thane west Off Ghodbunder Road
Residential 4‐ BHK Rs 29.5mn onwards
Nearing Completion
Mantri Realty Serene Goregaon East Off Film City Road Residential 1‐2‐3 BHK Rs 8.5mn onwards
Nearing possession
Damji Shamji shah group
Mahavir Universe Phoenix
Bhandup (West) LBS Marg Residential 2‐2.5‐3‐4 BHK (1160‐2243 sqft)
Rs 13.3‐25.7mn
Damji Shamji Shah Group
Tivon Park Ghatkopar West Off LBS Marg Residential 1‐2‐3 BHK Rs 7.324 mn onwards
Damji Shamji Shah Group
Mahavir Millennium
Thane West Off Pokhran Road 25/75 Residential 2‐3 BHK (508‐1199sqft)
Rs 6.5‐12mn Dec‐15
Damji Shamji Shah Group
Mahavir Kalpavruksha
Thane West Ovala Village 20/80 Residential 1‐2 BHK (627‐945sqft)
Rs 4.63‐9mn Dec*2014
Damji Shamji Shah Group
Mahavir Estella Thane West Ghodhbunder Road
Residential 1‐2 BHK Rs 3.95‐5.6mn onwards
S Raheja Realty Natraj madhu Park
Khar West Madhu Park Residential 4 BHK Rs 105.0mn onwards
Madhav Shreeji Palacia Thane west next to Hiranandani estate
Residential 1 BHK, 1.5BHK,2 BHK,2.5BHK
Rs 6.2 mn onwards
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Developer Name of the Project
City Location Subvention scheme
Residential/ Commercial
Size (In Sqft) Price/ unit Possession
Bhoomi Group Bhoomi Legend Kandivali East Off W.E.Highway Residential 1‐2 BHK Rs 7.4mn onwards
Ready possession
Kalpataru Kalpataru Hills Thane west Residential 2‐3 BHK Rs 11.9mn onwards
Rustomjee Urbania Thane West Near majiwada junction
Y Residential 2 ‐3bhk Rs 10.2mn onwards
Kalpataru Radiance Goregaon West Next to Prabodhan Krida Bhavan
Residential 2‐3‐4 BHK (1342‐3308 sqft)
Rs 18‐45mn
Kolte‐Patil Tuscan Estate Pune Kharadi Residential 3‐4 BHK (1970‐2500Sqft)
Rs13.8mn onwards
Hiranandani Rodas Enclave Thane West Off Ghodbunder Road
Residential 2‐3‐4‐5 BHK Rs 14.5mn onwards
Gundecha Zenith Mulund West P.K.Road Residential 2‐3 BHK 17.3mn onwards Gundecha Altura Kanjurmarg
West LBS Road Residential 2‐3 BHK (888‐
981 sqft) Rs 17500/sqft Ready
possession Gundecha Montego Andheri East Sakinaka Residential 1‐2 BHK Rs 6.8mn
onwards
Gundecha Asta Andheri East Sakinaka Residential 1‐1.5‐2‐2.5 BHK Rs 7.3mn onwards
Prithvi Edifice Prithvi Presidio Pune Margarpatta City Residential 2‐3 BHK Rs 6850/sqft
Source: PhillipCapital India Research
NCR
• DDA to hike interest rate for housing registration deposits: Delhi Development Authority has decided to pay simple interest at 8 per cent instead of the current 5 per cent on registration deposits for all its future housing schemes. the decision was taken in order to "narrow the gap" between the interest paid to the allottees and that charged for delayed payments for its housing schemes.
• Omaxe eyes 20% rise in sales booking in FY15 at over Rs 25bn: In terms of volume, sales bookings fell by 31 per cent to 7.83 million sq ft in 2013‐14 fiscal. However, the average realisation grew by 29 per cent to Rs 2,692 per sq ft. Delhi‐based Omaxe has presence in nine states across 30 cities. It is executing about 125 mn sq ft of area currently, comprising 14 group housing, 18 integrated township and 10 commercial projects.
• Brys Group gives Rs 3.3bn construction contract to UAE's ACC : Brys Group has given a Rs 3.3bn contract to UAE‐based Arabian Construction Company for the development of 81‐storey tower in Noida. Brys Group is developing a super luxury project on Noida Expressway which is spread over 7.5 acres and comprises 291 flats at an investment of about Rs 8.5bn.
• Delhi Development Authority to roll out 'largest‐ever' housing scheme by July end : Delhi Development Authority will be rolled out for city‐ dwellers by July end, offering over 26,000 flats across various categories with most of them being built with "green technology . It has 24,000 one‐room apartments and another 2000‐ 2,500 flats lined up in the DDA, 2014, housing scheme. The houses will be spread across Rohini, Narela and Dwarka and will be priced from Rs 14‐15 lakh to Rs 10 mn.
• Noida builders unable to hand over completed homes as National Green Tribunal stops delivery: Builders in Noida are unable to hand over more than 30,000 completed homes to their buyers, because of a National Green Tribunal order forbidding the Noida Authority from giving completion certificates to projects within a 10‐kilometre radius of the Okhla bird sanctuary.
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• Delhi to propose 100 m eco‐sensitive zone around Okhla Bird Sanctuary: Echoing the Uttar Pradesh Government’s proposal in January to notify 100 metres around the Okhla Bird Sanctuary as “eco‐sensitive zone”, the Delhi Government’s Forest Department is set to propose the same. As per a directive issued by the National Board for Wildlife (NBW) in 2005, a radius of 10 km around sanctuaries — which in the instance of Okhla will affect a number of proposed real estate projects — is to be considered an eco‐sensitive zone.
• Redeveloped government colonies in Delhi may offer homes, offices to public:. The public sector National Buildings Construction Corp (NBCC), which has the mandate to redevelop government colonies, is considering selling or leasing some parts of Netaji Nagar, Kasturba Nagar and Tyagaraj Nagar. Delhi has about 30 colonies, covering an aggregate 1,100 hectares of prime land, for housing assorted ranks of government officials. The government plans to redevelop these colonies, most of which are old.
• Land allotment rates hiked by 10% in Noida, YEIDA: New Okhla Industrial Development Authority (Noida) and Yamuna Expressway Industrial Development Authority (YEIDA) approved a 10 per cent hike in land allotment rates in their board meeting. The residential sector rates per square meter after hike range from Rs 68,750, Rs 47,920, Rs 34,900, Rs 29,170 and Rs 25,000 for category A,B,C,D and E. YEIDA residential sector rates per sq m after hike is Rs 11,500. Group housing plot rates is Rs 14,000.
• Indiabulls co‐founder Rajiv Rattan to buy house in Lutyens Delhi for Rs 2.2bn: Rajiv Rattan, co‐founder of Indiabulls Group, is buying a bungalow on Amrita Shergill Marg in the Lutyens Bungalow Zone for Rs 2.2bn. The home, on a 2,920 sq yard plot with 10,000 sq ft of built‐up space, is down the road.
• SC order on Noida projects puts ball back in National Board of Wildlife’s court: The Supreme Court order on June 10 dismissing a plea by real estate firm Jaypee Infrastructure that the Noida Authority grant completion certificates for its constructions projects located in a yet‐to‐be delineated “eco‐sensitive area” of the Okhla Bird Sanctuary has put the ball back in the State Government’s court.
• SC allows Supertech to remove temporary structures: The Supreme Court allowed Supertech Ltd to remove temporary structures from its project, Emerald Court in Noida, as it could prove dangerous during rain and thunderstorms.
• Circle rates to go up in Noida, Ghaziabad: Following the hike in land allotment rates in Noida, the UP stamp and registry department is all set to increase circle rates in Noida, Greater Noida and Ghaziabad. The revised circle rates will be implemented from August 1 in both Gautam Budh Nagar and Ghaziabad.
• Delhi government orders cost audit for real estate: The government on June 30 ordered maintenance of cost records and audit for real estate companies, hospitals and educational institutions to drive in transparency and keep a check on their costing. The move will bring in the much‐required transparency in fixing of prices in areas like housing and treatment costs at hospitals, while keeping a check on the fee charged by private educational institutions.
• New apartment act in Delhi dumps co‐ops: Close to 20 lakh people live in Delhi’s apartment blocks for whome buying, selling and transferring property or applying for loans against their property is a bureaucratic hurdle with lots of paperwork and corruption. Delhi Apartment Ownership (DAO) 1987 Act had simplified the process for the flat owners by letting the builder or promoter of the flat execute a lease deed, which worked like a sale deed, and spared the owner from paperwork to correctly furnish title of the property and apply for freehold.
• Delhi requires power to acquire land: Joining the chorus for a review of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013, Delhi government has put forth before the
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Centre the urgent need to empower Delhi with the powers to acquire land. All new infrastructure projects that require land acquisition cannot take off till the Centre delegates powers to Delhi which falls under the category of union territory under the Act that came into force earlier this year on January 1.
• Delhi downsizes as NCR population booms, census data shows: Recently released census data shows that between 2001 and 2011, population in Mumbai, Kolkata and two inner districts of Delhi declined, while in Hyderabad and Chennai only a small increase took place. But surrounding regions of these cities showed phenomenal growth indicating a shifting center of gravity in metropolises. Declining populations in some of the metropolises is notable though unsurprising. These cities are unable to absorb further migration due to high cost of living, explains RB Bhagat, head of migration and urban studies at the Mumbai‐based International Institute for Population Sciences.
• Only 35% allotted industrial plots in Greater Noida in use: Less than 35% of land allotted for industrial purposes by the Greater Noida Authority is being actively utilized. Lamenting the fact, the Noida Entrepreneurs Association (NEA) said only 771 of the 2,248 industrial plots sanctioned by the authority are in active use. This, at a time when CM Akhilesh Yadav is inviting investors to Noida, Greater Noida and Yamuna Expressway.
• Greater Noida to IGI Airport Metro link on fast‐track: The Greater Noida Industrial Development Authority (GNIDA) is getting ready to fast‐track its plan of connecting a 66‐km route between Greater Noida and the Indira Gandhi International (IGI) Airport via a high‐speed metro link. Having completed the feasibility report for the project, final touches are being given to the project’s detailed project report.
• New Gurgaon sectors to get Rs 26.9bn power infrastructure: Haryana Urban Development Authority (HUDA) announced on June 17 a budget of Rs 26.9bn to develop the electricity infrastructure in the upcoming sectors.
• DDA asked for land policy: A parliamentary panel has asked DDA to finalize its land pooling policy and involve the private sector and cooperative group housing societies in meeting the housing needs in Delhi. The standing committee on urban development, in report in Parliament, said the agency should set year wise targets for the construction of affordable houses. The panel said it has estimated an additional housing stock requirement of about 24 lakh dwelling units.
• Haryana asked to report on Mangar buffer: Haryana’s decision to demarcate only 60 metres of buffer around Mangar Bani sacred grove in Aravalis as “no construction zone” has become a bone of contention between the state and National Capital Region Planning Board. The board’s secretariat has written to Haryana government seeking a compliance report on this issue since the state had agreed committed to earmark 500 metres around the forest for no construction activity.
• Owning a farmhouse in NCR gets tougher: In a decision which will hit the lifestyles and ambitions of several rich and elite residents of the Millennium City, the Haryana government on June 4 decided to stop issuing change of land use (CLU) licences for farmhouses in agricultural zones falling under highly sensitive zones. Agriculture land in the National Capital Region (NCR) – particularly around Aravali – is considered a highly sensitive zone. Officials in the department of town and country planning (DTCP) said the decision was taken considering the misuse of farmhouses for commercial activities.
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Residential Projects ‐ Recent and New Launches in Delhi Developer Name of the
Project City Location Subvention
scheme Residential/ Commercial
Size (In Sqft) Price/ unit Possession
Super Tech Limited Eco Village Greater Noida (West)
Greater Noida (West)
40/30/30 Residential 2‐3‐4 BHK Rs2.4mn onwards
Ansal housing & construction Ltd.
Ansal highland park Gurgaon Sector 103 20% on booking next 2 year no EMI
Residential 2‐3 BHK Construction in full swing
CHD Developers 106 Golf Avenue Gurgaon Dwarka Expressway
12.5/88.5 Residential 2‐3‐4 BHK
CHD Developers CHD Van Gurgaon Sec‐71 Residential 2‐3‐4 BHK Ajnara Ambrosia Noida Sector‐118 30:30:30:10 Residential 2‐3‐4 BHK Rs4.336mn
onwards
Amrapali Group Spring Meadows Greater Noida (West)
GH‐07 A, Tech Zone IV
Residential 1‐2‐3 BHK Construction in Full Swing
Amrapali Group Amrapali Zodiac Sector‐120 Noida 40/30/30; book penthouse or
Ground floor get dream car free
Residential 2‐3‐4 BHK Ready to move in
Amrapali Group Amrapali Platinum Noida Sector‐119 40/30/30; book penthouse or
Ground floor get dream car free
Residential 2‐3‐4 BHK Ready to move in
Amrapali Group Amrapali Sapphire sector‐45 Noida 40/30/30 Residential 2‐3‐4 BHK Ready Possession
Amrapali Group Amrapali Eden Park Noida Sector‐50 40/30/30 Residential 2‐3‐4 BHK Ready to move in
Amrapali Group Amrapali River Group
Greater Noida West
Next to Hindon River
Residential 2‐3 BHK Construction in full swing
Amrapali Group Princely estate Noida sector‐76 40/30/30 Residential 2‐3‐4 BHK Nearing possession
Amrapali Group Amrapali Verona heights
Greater Noida West
Greater Noida west
40/30/30 Residential 2‐3‐4 BHK Attractive rates for mimited period
Construction started
Amrapali Group Kingswood Greater Noida West
Greater Noida west
Residential 2‐3 BHK Construction started
Amrapali Group Amrapali Crystal Homes
sector‐76 Noida 40/60 Residential 3 BHK Rs 6.3mn onwards
Construction started
Amrapali Group Leisure Park Greater Noida West
Greater Noida west
40/60 (get waiver all charges)
Residential 2‐3 BHK Rs 3.1mn onwards
Amrapali Group Dream Valley Greater Noida west
Greater Noida west
Residential 2‐3 BHK Rs2.7‐3.5 mn onwards
Construction in full swing
Ace Group India Ace Golfshire Noida Sector‐150 Residential Rs 4000/sqft Aditya builders Aditya world city Ghaziabad NH‐24 Residential 3 BHK Rs 3.1090mn
onwards possession in 12 months
Mahagun Group Mywoods Greater Noida West
Sector‐92 20/80 and 10gm free coin
Residential 2‐3‐4BHK Rs 3.169 onwards
Mahagun Group Mirabella Noida Sector‐79 20/80 and 10gm free coin
Residential 3‐4 BHK Rs 6.417 onwards
Sethi Group Max Royal sector‐ 76 Noida Residential 2‐3 BHK (895‐1650 sqft)
Sethi Group Sethi Arcade sector‐ 76 Noida Commercial Launching soon
Sethi Group Sethi Business Avenue
Angel mega mall
Kaushambi Commercial Rs1.812mn onwards
Ready Possession
Satya Group Platina Gurgaon Sector‐103 30/70 Residential 3‐4 BHK Unnati Fortune VestaVillas Noida
Expressway Sector‐144 Residential Villas Rs 25.0mn
onwards
Super Tech Limited Hues Gurgaon sector‐ 68 Residential 2‐3 BHK Rs 2.8mn onwards
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Developer Name of the Project
City Location Subvention scheme
Residential/ Commercial
Size (In Sqft) Price/ unit Possession
Ansal Housing & Construction Ltd.
Florence Residency Gurgaon Sector 56& 57 No Pre‐ EMI/ Rs 7 lac special discount
Residential 4 BHK (1834‐2114 sqft)
Rs 15.8 mn onwards
Fair wealth Breeze homes Bhiwadi Residential 1‐2‐3 BHK Rs 2600/sqft Aditya Builders Celebrity Homes Noida Sector‐76 Avail up to 7 lacs
discount Residential 2‐3‐4 BHK Rs5.5mn
onwards Nearing
Possession Unnati Fortune The Aranya Noida Sector 119 20/80 available Residential 2‐3 BHK Construction
in full swing SG Estates Limited SG Impressions plus Rajnagar
Extension Gaziabad Residential 3‐4 BHK Rs 3.3mn
onwards Ready
Possession SG Estates Limited SG Alpha tower Sector‐ 9
Vansundhara Gaziabad Commercial 400 Sqft Rs 3mn
onwards Ready
Possession SG Estates Limited SG Homes Sector‐ 3
Vansundhara Gaziabad Residential 2‐3‐4BHK Rs 6mn
onwards Nearing
possession SG Estates Limited Indigo SG
Impressions 58‐ phase 2
Rajnagar Extension
Gaziabad Residential 3 BHK Rs 4.1mn Nearing possession
SG Estates Limited SG Grand Rajnagar Extension
Rajnagar Extension
Gaziabad Residential 2‐3 BHK Rs 2.75mn onwards
Under Construction
SG Estates Limited SG Benefit Govindpuram Gaziabad Residential 1‐2‐3 BHK Rs 2.3mn onwards
Launching soon
Horizon Concept Orizzonte Greater Noida KP‐3 Residential 2‐3‐4 BHK Super Tech Limited Romano GH‐01,Noida Sector‐118 Residential 2‐3 BHK Rs 3700/sqft
onwards
Super Tech Limited Aapka Ghar Greater Noida West
5 mins from Noida
Pay only 3‐4 Lakh (2‐3 BHK); get 5%
cash back
Residential 2‐3 BHK
Super Tech Limited Capetown Noida sector‐74 100 acres 50% in possession
Residential complex
2‐4 BHK 4560
Shukamna Buildtech Pvt. Ltd.
Shubhkamna Lords live t o play
Noida Sector‐79 Residential
Paras Buildtech Paras Seasons Noida 68, Expressway Residential Super Tech Limited North Eye Noida Sector‐74 40/60 Residential 1‐2‐3‐4 BHK Rs4.3mn
onwards
Super Tech Limited North Eye Noida Sector‐74 Residential Super Tech Limited Ritz Chateaue Noida Sector‐74 40/30/30 Residential 2‐3‐4 BHK Rs2.4mn
onwards
Source: PhillipCapital India Research
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Bangalore • KPMG plans to lease over 0.7 mn sq ft of office space in Bangalore: KPMG plans to
lease in Bangalore over 0.7 mn sft of office space, the largest office space absorption so far in the country's commercial office space this year, as it plans to add about 10,000 professionals to its workforce over the next four years across India. RMZ has locked in 0.76 mn sq ft in RMZ Ecoworld for KPMG, which will be taken up in phases. In the first phase it will occupy 4.6 lakh sq ft, while balance 3 lakh sq ft will be occupied in the second phase, that is yet to be built and will depend on KPMG's requirement.
• Flipkart leases office space in Bangalore: Flipkart has leased 0.15mn sq ft of commercial office space across three locations in Bangalore, as it seeks to expand operations and consolidate. The leasing deals, done in March and April, are the biggest by any online retailer in the country so far.
• BCIC’s plan to decongest city: a new capital for State: The State government should explore the possibility of setting up a new capital somewhere in central Karnataka. The idea, apparently, was mooted during Bangalore Chamber of Industry & Commerce (BCIC) Karnataka Economic Summit of December last year by former chief secretary A. Ravindra, an expert on urban development matters.
• Brigade launches new residential project in Bangalore: Brigade Enterprises has launched a new residential project at Brigade Meadows on Kanakapura Road in Bangalore. The project called Wisteria, next to the Art of Living campus in Bangalore, will consist of 2‐ and 3‐ bedroom luxury apartments ranging from 1,120‐1,630 square feet. The 1 bedroom apartment size will range from 680 to 900 square feet. The company has announced a launch price of Rs. 45.5 lakh (basic cost).
• Civic infrastructure leads to development in Bangalore: The upgradation of civic infrastructure enabled the opening up of areas in the peripheries. The Bruhat Bangalore Mahanagara Palike (BBMP) has planned to upgrade civic infrastructure in the Central Business District (CBD) adhering to Tender SURE guidelines. This will ensure good quality roads without the need to dig them up frequently with separate space allotted for utilities. Along with Metro connectivity, this will lead to increased interest in the CBD and premium residential localities around. The BBMP plans to widen the key arterial roads around the city, such as Sarjapur Road, Kanakapura Road and Bannerghatta Road. Planned connectivity to these key commercial and residential locations through the Metro has turned them into prime micro‐markets.
• HC puts brakes on Akrama‐Sakrama in Bangalore: The much touted Akrama‐Sakrama, the scheme to regularize building violations, will have to wait for some more time to be implemented in Bangalore. Stating that it isn’t conducive for the state government to go ahead with legislation on such issues, the Karnataka high court on June 20 passed an interim order restraining the government from going ahead with implementation of the scheme till the Bangalore Metropolitan Planning Committee (BMPC) is duly constituted.
• Infopark pacts with Brigade Group to set up hotel at campus: Brigade Group has tied up with Infopark to set up a hotel property at the latter's campus at Kakkanad near here. The hotel will come up in 97 cents of land leased for 90 years (1 acre equals 100 cents).
• Karnataka scraps green panel: the Karnataka government has scrapped the State Environmental Clearance Committee (SECC), which was in place for the last 29 years. This will enable the government to approve many small and medium industrial, infrastructure, mining and biotech projects among others without any review of their significant environmental and social impacts.
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Residential Projects ‐ Recent and New Launches in Bangalore Developer Name of the
Project Location Subvention
scheme Residential/ Commercial
Size (In Sqft) Price/ unit Possession
GM Infinite Dwelling e city town BTM Layout Residential 2‐3 BHK Rs3‐4.0 onwards
Mahaveergroup Riviera JP nagar 5th phase Residential Rs 7.8mnMahaveergroup Tranquil Whitefield Residential Rs 7.8mnMahaveergroup Laurel BTM 4th stage Residential Rs 5.7mnMahaveergroup Oleander Off Hosur road Residential Rs 4.8mnMahaveergroup greens Mysore Road Residential Rs 4.4mnMahaveergroup cedar Hesaraghatta road Residential Rs 3.5 mnMahaveergroup Desire off tumkur road Residential Rs 3.3mnMahaveergroup fortune off magadi road Residential Rs 2.8mnMahaveergroup galaxy off mysore road Residential Rs 2.9mnMahaveergroup Maple Kundalahalli jn., varthur
main road Residential 3 BHK and duplex Rs 8.3mn
Mahaveergroup Jonquil J.P.Nagar, 6th Phase Residential Rs 6.2mnMahaveergroup Oberon JP nagar 5th phase Residential Rs 5.7mnMahaveergroup Willet Kumbena Agrahara Residential Rs 3.2mnMahaveergroup Amaze Kadugodi, Whitefield Residential 2‐3 BHK Rs 4.5mnHRC Ventures HRC Ibbani Jakkur Residential 2‐2.5‐3 BHK Rs 5.0mn
onwards Navami Navami Symphony Rajarajeshwarinagar Residential 2‐3 BHK Navami Nandini Layout 2nd Circular Road Residential 2‐3 BHK Rs 8.0mn
onwards Navami Basaveshwaranagar Behind Ashoka Hospital Residential 2‐3 BHK Rs 10.00mn
onwards Navami Sheshadripuram Next to ICICI Bank Residential 2‐3 BHK Rs 20.00mn
onwards Navami Yelahanka Anantapura main Road Residential 2‐3 BHK rs 8.0 onwardsHebron Properties Pvt. Ltd.
Hebron Enclave KR Puram Residential Villas Rs 32.1mn onwards (Rs 6299/sqft)
Jul‐14
DS‐ Max Properties Pvt. Ltd.
Attible E. City Residential Rs1.444‐3.680mn
DS‐ Max Properties Pvt. Ltd.
Peenya Opp. Rock Line Studio Residential Rs 2.627‐4.271mn
DS‐ Max Properties Pvt. Ltd.
Opp. Manyata Tech Park Residential Rs 4.3‐5.772mn
Pruksa India Housing Pvt.Ltd.
Pruksa Silvana Whitefield Residential Villa, Rowhouse Rs 8.8mn/Rs 5.8mn onwards
Nov‐14
Dhammanagi Developers Dhammanagi Sumo Leaves
Kanakapura main Road Residential 1‐2‐3 BHK Rs 3.327‐6.414 mn onwards
Dhammanagi Developers Lilium Gardenia Near Manyata Tech Park Residential 2‐3 BHK Rs 4.108‐5.924mn onwards
Maithri Developers Shilpitha Splendour Annex
Mahadevapura Residential 2‐2.5‐3 BHK May‐14
Prisha Properties India Pvt. Ltd.
Hanging Gardens Near Hebbal Residential 3‐4 BHK (1860‐4355 Sqft.)
Rs11.0mn onwards
Prisha Properties India Pvt. Ltd.
Greens Off Sarajapur Road Residential 2‐3 BHK Rs7.1mn onwards
Sowparnika projects Purple Rose Hoskote Main Road Residential 2‐3 BHK Rs 1.99mn onwards
Golden Gate Golden Homes III Off Sarjapur Road Residential Villas (1795‐4055 sqft) Rs 6.45mn onwards
SLS developers Sunny gardens Doddanakundi Residential 2‐3 BHK Rs 4.1mn onwards
SLS developers Sapphire marathahalli‐sarjapur outer ring
Residential 2‐2.5‐3 BHK Rs 3.7mn onwards
SLS developers Spencer Horamavu Residential 4 BHK Rs 15.3mn onwards
Krishna Enterprises Krishna Mystiq Pragathi Nagar, Basapura Residential 2‐3 BHK Rs 5.5mn onwards
Srinivasa developers Sai poorna Harlur road Residential 2‐3 BHK
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
Developer Name of the Project
Location Subvention scheme
Residential/ Commercial
Size (In Sqft) Price/ unit Possession
JR Housing JR Urbania Near E‐City, Centre of KHB Suryanagar II
Residential Villa plots Rs 2.1mn onwards
Bluejay Bluejay Behind Rajarajeshwari Residential plot sizes‐ 1200 sqft. DSR Infrastructure Pvt. Ltd.
Sunrise Towers Hope Farm, Whitefield Residential 3 BHK
DSR Infrastructure Pvt. Ltd.
Woodwinds Sarjapur Road Residential 2‐3‐4 BHK Mar‐14
DSR Infrastructure Pvt. Ltd.
Eden Greens Off Sarjapur Road Residential 2‐3 BHK
DSR Infrastructure Pvt. Ltd.
Ultima Haralur, Off Sarjapur Road Residential 2‐3 BHK Oct‐13
DSR Infrastructure Pvt. Ltd.
Green fields Whitefield Residential 2‐3 BHK Oct‐13
Golden Gate Panorama Jayanagar Residential 2‐3 BHK Rs 5.1 mn onwards
Golden Gate Golden Grand Phase‐I
Yeshwanthpur Station Residential 2‐3 BHK Rs 8.120mn onwards
Ready Possession
Shriram Properties Shriram Sahaana Yelahanka Residential 3BHK Rs 7.8mn onwards
Shriram Properties Shriram Suhaana Yelahanka Residential 1‐2 BHK Rs 4.8 mn onwards
Shriram Properties Shriram Sameeksha Jalahalli Residential 1‐2 BHK Rs 3.0mn onwards
Rohan builders pvt. Ltd. Rohan Avriti ITPL Road Residential 2‐3 BHK Sumadhura infracon Pvt. Ltd.
Srinivasam Hoodi, Whitefield Residential 2‐3 BHK 1190‐1900 sqft Dec‐14
Sumadhura infracon Pvt. Ltd.
Sankalpam Hoodi, Whitefield Residential 2‐3 BHK Jul‐15
Prisha Properties India Pvt. Ltd.
Orchids Near Hebbal Residential 2 BHK (1440‐1630); 3 BHK (2050‐3150 sqft), 4 BHK (3330 sqft)
Rs 6.48mn onwards
MIMS Builders Renaissance Off Thanisandra Residential 2‐3 BHK Rs 4.8mn‐5.4mn onwards
Skylark Homes SKYLARK ITHACA Near ITPL Residential 1‐2‐3‐4BHK Rs2.35mn onwards
S2 Homes Butterfly Gardens Jigani Residential Plots (56‐222sq mtrs) Rs 1.449mn onwards
S2 Homes Senart City (Avantika)
Sarjapur Road Residential 2‐3 BHK (1095‐1509 sqft)
Rs 2.997 mn onwards
KSR Properties Cordelia Dasarahalli Residential 2‐2.5‐3 BHK (1035‐1452 Sqft)
Rs 5.7mn onwards
Confident Group Confident Leo Sarjapur Road Residential 3 BHK Brigade Group Wisteria Kanakapura Road Residential 2‐3 BHK Rs 4.6mn
onwards Prestige Royale gardens Yelahanka‐ Doddaballapur
road Residential 1‐2‐2.5‐3 BHK
Alpine Alpine Fiesta Hoodi Junction, Whitefield Residential 2‐3 BHK Rs 3.65mn onwards
Alpine Alpine Viva Sai baba Ashram, Whitefield
Residential 3 BHK Rs 4000/sqft
Vasathi Housing Vasathi Avante Hebbal Residential 2‐2.5‐3BHK Rs 4.536mn
Source: PhillipCapital India Research
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
Chennai
• Chennai developers roll out deals to boost sales: Over 100 new properties in Chennai now come packaged with deals to attract home buyers. They range from free registration, discounts of Rs 50‐300 per sq ft, free modular kitchens, free woodwork, wardrobes, discounts up to Rs 2 lakh, Rs 25,000 as a token if you have referred another prospective buyer and up to 7 per cent discount for a limited time period. In an attempt to increase sales, renowned and city‐based developers have tried this attractive way to be crowd stealers in Jalladiampet, Nanmangalam, Pallikarnai, Porur, Sholinganallur, Sithalapakkam, Thiruvanmiyur, Perumbakkam, Padi and Veerapuram.
• Chennai is among world’s top 12 realty markets: Globally acclaimed design house Savills, Candy & Candy, and Deutsche Asset & Wealth Management report says that Chennai is among the twelve rising cities that would outdo the prime global cities in terms of real estate. What is cited as the reason is the fact that it is a cultural hub.“Prices in these rising cities are generally much lower than in the world cities, which make them more accessible and attractive to yield‐seeking real estate investors.
• Construction in Chennai hit by checks on lorries: A crackdown by the transport department on vehicles overloading construction material and bringing them into the city has hit the supply and demand, affecting several projects and sending the price of materials like cement and steel soaring. The industry has appealed for government intervention, stating nearly one‐fourth of all construction activity has been affected
Residential Projects ‐ Recent and New Launches in Chennai Developer Name of the
Project Location 20/80
scheme Size (In Sqft) Price/ unit Possession
Stylone properties The grand Valmiki Nagar 3 BHK (2512‐3136sqft) Vijay Shanti Builders Bouleyard Vandalur‐
kelambakkam 11 Row houses
Greenrich Village Parjay promoters & developers
Near madhuranthagam
Plots‐1500‐3000sqft Rs 140/ sqft
Shantiniketan Altair Kelambakkam 1‐2 BHK Rs 1.589‐1.901 mn Shriram Properties Shriram One city Valarpuram Villas Rs5.1mn onwards Unitech Uniworld city Nallambakkam 2‐3 BHKUnihomes, Palm
villas and aspen greens Unihomes: Rs 2.3mn;
Aspen gardens:Rs 5.1mn onwards; Palm
premiere:Rs 7.66mn onwards
Arinhant/ unitech Greenwoodcity Plots on Omr 1800‐3500sqft plots BSCPL Bollineni Hillside 2 near
Sholinganallur 1‐2‐2.5‐3 BHK
MM builders Subhamm perungalathur by pass road
1‐2‐3 BHK Rs 1.6mn onwards
MM builders Srushti perungalathur by pass road
1‐2‐3 BHK Rs 3299/sqft
Urban Tree Green Township Perumbakkam 2 BHK Rs 3599/sqft Hansa estates Hansa Abhinav Thiruvottiyur 1‐2 BHK Rs 3500/sqft VJS Rises Near
Thuraipakkam 2‐3‐4‐4.5 BHK Rs 5500/sqft
Shree Vishnu Builders Magnolia apartments
Porur 2‐3 BHK Rs 6300/sqft
Amrit promoters Pranav Orchid Padappai Independent house Rs 3.6mn Landmark construction Geethanjali Annanagar West 3 BHK‐1525 sqft Construction in full
swing Landmark construction Aspects Korattur 3 BHK (1660‐1674sqft)
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
Developer Name of the Project
Location 20/80 scheme
Size (In Sqft) Price/ unit Possession
Landmark construction evania Perungudi 2‐3 BHK (1154‐1697Sqft) Landmark construction Tivoli Mogappair 2‐3 BHK 1213‐1884 sqft Colour Homes Color Castle Perumbakkam 2‐3 BHK 774‐1453 Sqft Rs 3350/Sqft Urban Tree Infinity Porur 2 BHK Rs 6.1mn onwards BBCL ashraya Thoraipakkam 2‐3 BHK (1070‐1480sqft) Jain Housing and Construction Ltd.
Inseli Park OMR‐Padur Pay 10% and balance on possession
Rs4.5mn onwards Nearing completion
Jain Housing and Construction Ltd.
Alpine Meadows Pallavaram Pay 10% and balance on possession
Rs 4.2mn onwards Phase I handover
Jain Housing and Construction Ltd.
Pebble Brook Thoraipakkam Pay 10% and balance on possession
2‐3‐4 BHK‐996‐2523sqft no pre emi 200/sqft discount
Jain Housing and Construction Ltd.
La Verde Mare Perungudi Pay 10% and balance on possession
launching shortly
Jain Housing and Construction Ltd.
ARJ Gardens Mogappair West Apartments 506‐1572 sqft
Jain Housing and Construction Ltd.
Avalon Springs Potheri ‐Off GST Road
2‐3 BHK (815‐1258 sqft)
Jain Housing and Construction Ltd.
Jains Westminster Saligramam
Shriram Properties Shriram One city Valarpuram Villas Rs5.1mn onwards Unitech Uniworld city Nallambakkam 2‐3 BHKUnihomes, Palm
villas and aspen greens Unihomes: Rs 2.3mn;
Aspen gardens:Rs 5.1mn onwards; Palm
premiere:Rs 7.66mn onwards
Intouch Construction & Infrastructure Pvt. Ltd.
Amora Manapakkam 2‐3 BHK Rs 5.5‐9.5mn onwards Construction in full swing
P dot G construction (P) Ltd. P dot G Icon Maraimalai Nagar 1‐2 BHK (505‐1032sqft) Rs2499/‐sqft
Source: Media sources, PhillipCapital India Research
16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
Commercial • Investors ready $1 billion war chest for office assets in India: Foreign private equity
funds and pension funds are among investors that over the last 12 months have committed to invest more than $1 billion to buy or build commercial property in India as the government works to finalise rules governing real estate investment trusts ( REITs).
• Brookfield Asset Management to buy Unitech Corporate Park assets for Rs 35bn: Brookfield Asset Management is acquiring 100% shareholding in four SEZs owned by UnitechBSE 2.56 % Corporate Parks (UCP) and a 60% shareholding in another two of its assets in India for Rs 35bn. he asset management firm has agreed to buy the entire stake of Candor Investments, a subsidiary of London Stock Exchange‐listed India‐focused real estate investment firm UCP that will forgo it 60% share in the firm's six commercial assets in India — five SEZs and one IT park. It has also signed a deal to buy Indian real estate firm Unitech's 40% stake in four of the six assets. Brookfield already owns 16.65% in Candor and is seeking to buy out stakes from other investors that include RBS AA Holdings (UK) Limited (20.08%), SC Fundamental (13.69%) and Roveda Holdings (9.01%)
FundFlows/Land Deals/Infrastructure announcements • HDIL to sell land parcels in Mumbai, Hyderabad to pare debt: HDIL plans to raise
up to Rs 18bn this fiscal by selling stakes in some of its assets to partly repay its debt by around Rs 6‐7bn in FY15. he realty firm wants to sell off its 100‐acre land parcel in Hyderabad and some of its commercial projects in Mumbai this fiscal . Sale of these properties could fetch Rs 10‐12bn.
• ASK Group exits investment in Pune property for Rs 870mn: It has exited its investment in a Pune residential project, developed by realty player Darode Jog Properties, for Rs 870mn. The investment of Rs 370mn made in the project has given a return of 2.35 times recording an IRR (internal rate of return) of 30 per cent.
• Parsvnath Developers to raise more than $167.5 million by divesting land assets : it plans to either sell the Rs 100bn worth land parcels in South‐West India or form joint ventures with local builders for development. Company is planning to monetise our land parcels in southern and western part of the country in cities like Chennai, Hyderabad, Kochi, Goa, Mysore and Palghat. Parsvnath has 85 acres land in Kochi, of which 50 per cent has already been notified as Special Economic Zone and process for the next half is in progress. It has 35 acres in Chennai and 75 acre in Mysore.
• Xander to buy Tata Realty and Infrastructure‐owned Infinity Tech Park for Rs 6.5bn : Xander Group Inc is buying Infinity Technology Park, a 7.8 lakh square feet commercial space owned by Tata Realty and Infrastructure in Mumbai suburbs, for roughly Rs 6.5bn. The deal signals renewed interest by private equity funds to build commercial real estate assets in India as it offers annuity returns for a longer tenure but with minimal risks.
• Indiareit Fund Advisors invests Rs 1.5bn in Omkar Realtors : Indiareit Fund Advisors is investing Rs 1.5bn in Omkar Realtors & Developers' residential project in Powai suburb of Mumbai. The developer and the fund have already signed the term sheets for the equity component of the project that is estimated to have saleable area of around 2.5 million sq ft. The first phase of the slum rehabilitation project involves 2,400 slums spread over 15 acres.
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Regulatory/National Trends
• Mahindra Group to launch affordable housing projects in Chennai and Mumbai : The projects, which will be launched through the developer's new business vertical called Happinest, will target families with total monthly income of up to Rs 40,000. The company is planning to build one‐two bedroom houses spread over 350 to 650 sq ft and priced at less than Rs 20 lakh. n the Mumbai Metropolitan Region, the company is planning to develop its project on 15 acres at Boisar while the Chennai project will be spread over 13 acres. it has already received major approvals for the Mumbai project while it is awaiting environmental clearance for the Chennai project.
• DLF puts Pune IT park on the block, eyes Rs 3bn from deal: As part of the plan, the company is selling its upcoming information technology park in Hinjewadi, Pune, aiming at Rs 3bn from the sale. DLF wants to use the proceeds to reduce its debt, of Rs 185bn as of March‐end. The two million sq ft IT park is under construction and DLF wants to sell as it is a “non‐core asset”. This is the second commercial property DLF is selling in Pune; it sold an IT park in the city to Blackstone earlier for Rs 8.1bn.
• Indian Green Building Council targets 10 billion square feet green building area by 2022 : Indian Green Building Council (IGBC) has over 2 billion sq ft area of green building projects has been registered so far and is targeting to have 10 billion sq ft by 2022. The licence agreement that IGBC had signed with USGBC in 2004 comes to an end in June 2014 and a new agreement is being signed for the next 10 years to work in the areas of advocacy, knowledge exchange and market transformation.
• National Buildings Construction Corporation offers new housing projects across country: The National Buildings Construction Corporation (NBCC) is offering new housing projects across the country in the coming months besides working on plans to redevelop as "green complexes" three government colonies in the capital. The housing projects for general public are underway in Gurgaon, Khekra (near Delhi), Patna and Kochi. The new projects would be also launched in Ghaziabad, Kolkata and second phase of the project in Alwar.
• Sahara Group residential project sold to Ahmedabad‐based firm: The Sahara group has sold approximately 4.21 lakh square metres of land belonging to its residential scheme 'Sahara City' here to city‐based developers for a sum of Rs 4.64bn.
• Govt. mulls single‐window nod for realty: Minister for IT and Panchayat Raj K.T. Rama Rao said that the government was open to coming up with a unified policy so as to help developers get faster approvals at lower cost.
• Starwood hotels to set up 100 hotels in India: Starwood Hotels & Resorts Worldwide Inc., one of the world’s largest hospitality chains, plans to expand its reach by setting up 100 hotels in India by the end of 2015. It has been managing 40 hotels across the country, and have signed deals for 32 new hotels, which are currently under development.
• Google claims over half of realty buying influenced by Internet: More than half of the real estate purchase decisions in India are influenced by Internet research, according to a study commissioned by search giant Google. As per the study, the overall influence of Internet on real estate transaction value of both residential and commercial property including rentals amounts to $ 43 billion, with $ 31 billion for residential and $ 12 billion for commercial. The study is based on a survey conducted by consultancy firm Zinnov across 15 cities in India, with over 6,000 respondents, along with real estate related search query trends on Google.
• Marvel to foray into compact luxury home space: Marvel Realtors (Pune based developer) that hitherto only built large luxury homes, is foraying into small luxury apartments. The company is set to launch new projects across locations in Pune
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
with apartment sizes ranging from 1,200 to 12,000 sq ft, all with the same high end specifications of uber luxury flats.
• Printing error which allows lower FSI in Pune to be rectified: Elected members in the Pune Municipal Corporation (PMC) are set to clarify their “printing mistake in the draft development plan”, which allots lesser floor space index (FSI) to citizens. The mistake is affecting the areas in sector 1 of the city. FSI in these areas for residential constructions has become 1 and for commercial constructions it has become 0.5. The printing mistake should be rectified. FSI for residential construction should be made 1.5 and for commercial areas it should converted to 1.
• DSK Developers launches Rs. 80bn township project: D S Kulkarni Developers Ltd has launched DSK Dream City, a township project under the Maharashtra Special Township Act at Loni on the Pune‐Solapur highway. The Rs. 80bn project involves building 12,000 residential units in seven phases with a target to complete it in eight years. It will be spread over 300 acres, of which 256 acres have already been acquired. The first phase of 1,044 homes has just been announced, and is expected to be ready for handing over by the end of 2017.
• Puravankara's real estate scheme not a CIS: SEBI: A commercial real estate scheme of Puravankara Projects does not fall under the collective investment scheme (CIS) category as there was no pooling of funds involved offering any assured returns.
• Buyer sentiment is weak: India’s residential sector is passing through interesting times. Here are the top trends as seen over the past three quarters o Supply – is showing signs of cyclical ups and downs depending on launches.
Affordable and lower‐priced residential corridors such as Greater Noida and NH‐8 (NCR‐Delhi), Western Suburbs and Thane (Mumbai), Whitefield and Hosur Road (Bangalore) and Southern Suburbs (Chennai) were the prime drivers of new launches.
o Demand – is on the slowing curve in NCR‐Delhi, but stable in all other cities, primarily on the back of new launches in emerging residential corridors. NCR‐Delhi contributed over one‐third of total new launches.
o Vacancy rate – in terms of available apartment units has risen across all cities and, barring Pune and Hyderabad, is at new market highs.
o Rents – have risen marginally across the residential markets of all the major cities such as Mumbai, Bangalore, Chennai and Pune.
o Capital values – have steadily risen across cities. Slowing sales has tempered price growth in the Tier 1 cities. Select residential corridors have shown price increments due to new launches at higher prices and subsequent price increases in surrounding projects. Overall, on a pan‐India basis, prices have risen by less than two per cent q‐o‐q for the past three quarters. Tier‐II cities have shown the fastest growth due to lower floor prices, with similar reasons contributing to growth in Chennai.
o Emerging corridors – developers explored newer corridors in cities, such as Sohna and NH‐24 (NCR‐Delhi), Ulwe and Karanjade (Mumbai) and Hennur Road (Bangalore) to offer lower‐priced projects to buyers.
o Infrastructure – projects planned and underway were positioned as pull factors for residential projects launched in the vicinity of such developments. New highways and Metro connectivity raised the attraction quotient for upcoming locations.
o Buyer/investor sentiment – remains weak given the high interest rates and rising residential prices. Investors have become cautious and are investing in select projects. By staying away, they have affected investor‐driven, speculative residential markets. Buyers have become fence‐sitters, waiting for economic headwinds to improve and better credit conditions.
o Developers – have shown more flexibility in offering discounts and are looking towards proactive policy changes. They are also targeting emerging corridors for low‐ticket project launches.
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Budget Highlights
Budget Proposals PhillipCapital Perspective
Introduction of REITs (Real Estate Investment Trusts), which will have pass through for the purpose of taxation i.e. SPV formed is not require to pay distribution tax while distributing profits to its investors. This result in avoidance of double taxation.
Positive for the sector as REIT not only provides the efficient and flexibility to raise capital but also provide liquidity i.e. an alternative to exit option to investors. Developers now use REITs to exit and rotate funds for credit crunch, liquidity of real assets and execution of property developments. Positive for DLF (29.35 mn sqft; rental revenues Rs 20bn), Prestige (7.45mn sqft; rentals Rs4bn) and Phoenix (5.31mn sqft; rentals Rs 3bn).
The proposed changes in FDI for real estate sector to provide habitation for the neo‐middle class, requirement of the built up area and capital conditions for FDI is being reduced from 50,000 sq mtr to 20,000 sq mtr and from USD 10 million to USD 5 million respectively with a three year post completion lock in. The projects which commit at least 30 per cent of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalisation requirements, with the condition of three year lock‐in.
The reduction in built‐up area and size of projects will allow mid‐sized and smaller developers with good track records better access to FDI and boost affordable housing in the country. Positive for Mahindra Life space and Puravankara
Higher tax exemption limits on interest on loan in respect of self occupied house property from Rs1.5 lakh to Rs 2 lakh and increase of deduction limit from Rs 1 lakh to Rs 1.5 lakh under Section 80C towards principal repayments for home buyers.
The tax benefit on housing loan interest for self‐occupied property has remained constant at Rs. 150,000 since 2001. However, real estate cost has increased many times and so is the quantum of loan which needs to be availed. An increase in exemption limit for self‐occupied property can result in additional tax savings and will help the realty sector.
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
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Research Engineering, Capital Goods Pharma
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16 July 2014 / INDIA EQUITY RESEARCH / REAL ESTATE MONTHLY
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