Gautam Chatterjee to head real estate regulatory body
The 1984-batch IAS officer, currently serving as Additional Chief Secretary (Public Health), is due for retirement in July this year
Chief Minister Devendra Fadnavis Wednesday appointed former additional chief secretary Gautam Chatterjee as the chairman of the newly formed Real Estate Regulatory Authority.
The retired bureaucrat, who has served as an officer on special duty in the CMO, was already holding the charge as interim regulator for the authority. Fadnavis, meanwhile, appointed a serving bureaucrat, Dr Vijay Satbir Singh, as one of the members of the authority.
The 1984-batch IAS officer, currently serving as Additional Chief Secretary (Public Health), is due for retirement in July this year. While a number of serving and retired bureaucrats were vying for these posts, a selection panel had recommended names of Chatterjee and Dr Singh.
Retired judge B D Kapadnis will serve as the second member. Following the announcement Wednesday, there was some speculation on whether Dr Singh will seek voluntary retirement.
But sources said he might hold both positions till July. The regulatory authority came into being on May 1.
By: Express News Service
Courtesy: http://indianexpress.com/ published on May 18, 2017
J&K may be first to bring real estate under new regime
SRINAGAR: Jammu & Kashmir may be the first state in the country to bring real estate within the ambit of goods and services tax (GST) when it enacts laws to integrate its indirect tax regime with other states, state finance minister Haseeb Drabu indicated. While the Centre and the states had amended the Constitution to move to GST, J&K will have to enact its own laws as it has a special dispensation under the Indian Constitution.
Drabu said he would move the required legislation in J&K assembly to be part of GST and ensure the benefits accrue to the state. The shift is expected to help the state garner around Rs 2,000 crore-worth additional resources to add to its current kitty of around Rs 11,000 crore and expand the tax base by close to 15%.
While the GST Council has agreed to subsume several taxes, including central excise, state VAT, service tax, central sales tax and octroi, it has kept around a third of state revenues outside the GST ambit. Alcohol, petroleum and real estate are three items on which GST will not be levied.
"We were the first to do many things and we may be the first to include real estate," Drabu told TOI ahead of the crucial GST Council meeting here. J&K has moved to a January-December financial year, was first to abolish the distinction between plan and non-plan spending and is now working on rolling out universal basic income, something that has been discussed in the latest Economic Survey.
Drabu said his government proposed to enact laws that would allow for levy of integrated GST, central GST and state GST amid indications that audit powers may not be split between the Centre and the state in the same way as it is done in the rest of the country.
By: Sidhartha & Rajeev Deshpande
Courtesy: http://timesofindia.indiatimes.com published on May 18, 2017
Real estate companies waiting for clarity on GST, new law: Study
Property consultant Knight Frank India and FICCI today released its real estate sentiment index, based on a quarterly survey of key supply-side stakeholders, which include developers, private equity funds, banks and non-banking financial companies (NBFCs).
Sentiment in real estate sector has improved post demonetisation but the industry is still in 'wait and watch' mode due to lack of clarity on reforms, including the new real estate law and GST, according to a study.
Property consultant Knight Frank India and FICCI today released its real estate sentiment index, based on a quarterly survey of key supply-side stakeholders, which include developers, private equity funds, banks and non-banking financial companies (NBFCs),
"Post the policy intervention by the government in November 2016 that shook the real estate sector, the current sentiment score (53) has seen a substantial uptick from the drastic fall seen in Q4 2016 that had pushed the score to 41, which is the worst in the last three years," the report said.
"This substantiates the transitory impact of the demonetisation policy initiative," it added.
The "wait and watch mode” is still prevailing in the sector in the expectation of clarity on various policy measures by the government in the next six months.
The stakeholders are not very clear about the impact of the changing environment on account of policy interventions like Real Estate (Regulation & Development) Act, 2016 (RERA), Benami Transactions (Prohibition) Amendment Act, 2016 and Goods and Services Tax (GST).
The real estate sector is facing a multi-year slowdown due to poor demand because of high prices. The sluggish demand has resulted in liquidity crunch to developers and huge delays in delivery of projects.
Courtesy: http://www.moneycontrol.com/ published on May 26, 2017
Real estate deals likely to close 20-255% lower than pre-RERA, pre-demonetisation prices
Mumbai: The Real Estate Regulation and Development Act (RERA) seems to have had an impact on sale of real estate in Mumbai as the City and Industrial Development Corporation (CIDCO) land auctions in Navi Mumbai last week witnessed 40 per cent lower bids than in November.
Considering RERA having limited the developers' capacity to buy land with advance payments from customers, land prices in Mumbai Metropolitan region have started falling, a moneycontrol report said.
The current bids varied between Rs 65,250 and Rs 96,000 per square metre in comparison to Rs 1.15 lakh and Rs 1.25 lakh in November, before the demonetisation drive.
CIDCO is selling six commercial and residential plots covering an area of 6,000 sq m in New Panvel. The Neelsiddhi Group purchased three plots, two at Rs 65,250 per sq m and one plot at Rs 76,000 per sq m. The Millennium Group acquired one plot at Rs 80,000 per sq m, while two plots went to the Satyam Group at Rs 77,000 per sq m and Rs 96,000 per sq m, the report said.
Contesting the possibility of a post-demonetisation effect solely driving the lowered bids, the report said that as developers made payments to CIDCO through cheques, RERA was most likely the primary cause.
The stagnant period is expected for another six months owing to RERA and demonetisation spillover, industry experts predict.
Approximately 25,800 residential units were launched in the first quarter of 2017 from the country's top eight cities, witnessing a 16 per cent decline from the corresponding quarter last year.
Real estate launches have seen a steady quarter-on-quarter decline for the last four quarters corresponding with the announcement of Real Estate Regulatory Act (RERA) 2016 in March last year and the demonetisation drive in November 2016, the report said.
Launches in the residential sector have declined by about 8 percent during the period April 2016- March 2017 compared to the same period in 2015-16. In Delhi-NCR, new launches declined by almost 50 per cent, in Kolkata it declined by 29 percent and Bengaluru by 24 percent, the report added.
Courtesy: http://www.timesnow.tv published on June 06, 2017)
Piramal Finance lends Rs 1,100 crore to real-estate developer Embassy Group
This has been done across residential, commercial projects in Bengaluru, Chennai and Hyderabad
Piramal Finance (PFL), the lending arm of Piramal Enterprises, on Wednesday said that it has financed Rs 1,100 crore to Bengaluru-based Embassy Group. This funding has been done sequentially across both residential and commercial projects in Bengaluru, Chennai and Hyderabad over the past six months.
Piramal first gave Rs 360 crore to Embassy Residences in Chennai — a premium residential project spread over 25 acres with 0.3 million square feet (sq ft) of built-up area and followed up with an investment in Phoenix-Embassy, which is a joint venture between Embassy and Phoenix Group of Hyderabad.
The JV is developing 1.5 million sq ft of grade-A commercial space in the financial district of Hyderabad with a potential to develop a further 4 million sq ft. Subsequently, PFL has provided Rs 650 crore of growth capital to the Embassy Group in Bengaluru.
The Embassy Group is one of India’s largest commercial real estate developers that has delivered 30 million sq ft of marquee commercial office space and 6 million sq ft of premium residential developments. The Group has a pipeline of 17 million sq. ft. of commercial developments in Bengaluru, Hyderabad and Chennai.
PFL Managing Director (MD) Khushru Jijina said, "We are pleased to have extended our relationship with the Embassy Group and look forward to a long and mutually beneficial association. I have always admired Jitu Virwani’s vision, track record and execution capabilities and we are happy to provide them with customised financial solutions as they scale up their presence across both residential and commercial segments.”
Jitu Virwani, chairman and MD, Embassy Group said, "We are delighted to be working closely with a large diversified conglomerate like the Piramal Group, which is known for structuring capabilities and quick turnaround time. We look forward to leveraging their capabilities as we partner with them on our growth capital requirements going forward.”
Courtesy: http://www.business-standard.com published on June 07, 2017
Now, affordable housing is driving home loan growth
MUMBAI: After years of selling pricey luxury homes that boasted amenities like signature golf courses and jacuzzis, builders finally seem to be moving toward modest apartments to suit middle-class pockets.
A clear indicator of this is the sharp uptick in home loans driven by sales of houses costing below Rs 30 lakh.
The cue for builders to change tack came from this year's Budget, which offered tempting tax and interest concessions for the affordable housing segment.
This year, almost half of all bank credit comprised loans to housing, given the almost non-existent corporate loan demand.
According to HDFC chairman Deepak Parekh, the corporation's January loan applications rose 21% over December. February applications were another 24% higher, and March was 44% more than the previous month.
"What is driving this growth is not high-value property but affordable homes, considering that the corporation's average loan size is Rs 25.6 lakh. This is the first time in several quarters that HDFC's average loan size has dropped from Rs 26 lakh,'' he said.
Property experts said Ahmedabad was the largest contributor of such homes (costing less than Rs 30 lakh), followed by Pune (up to Rs 50 lakh) and some areas in the Mumbai Metropolitan Region.
Housing finance providers are now expecting the affordable homes segment to grow at 25% given the subsidy under the Pradhan Mantri Awas Yojana. The scheme, available until December 2017, provides 4% subsidy on home loans of up to Rs 9 lakh for those with an income of up to Rs 12 lakh per year, and 3% subsidy on loans of up to Rs 12 lakh for those earning up to Rs 18 lakh per year.
Pankaj Kapoor, MD of Liases Foras, a real estate research firm, said on a quarter-on-quarter basis, maximum sales growth (31%) was reported in the affordable segment (properties priced below Rs 25 lakh), while the ultra-luxury segment witnessed a 4% decline in sales. The October to December 2016 period saw a slump following demonetisation, but demand between January and March 2017 was healthy.
Developer Niranjan Hiranandani said sales at his Thane project for flats below 600 sq ft had been good. "There will be a further surge when more projects start hitting the market and people start getting the tax benefits,'' he said.
Mortgage company Indiabulls Housing told investors that for a borrower seeking Rs 24 lakh, the effective rate he or she will pay works out to only 0.42% after factoring all tax breaks and subsidies.
"Effective home loan rate in the mid-income affordable housing segment is at near-zero levels. With rental yields at 3.2%, home ownership is very affordable and much cheaper than renting a house," a company official said.
According to Subhash Chennuri, senior consultant with consulting firm FSG, more finance is being made available for housing units which are as low or even below Rs 12 lakh. There are now a range of housing finance companies targeting customers who were traditionally not getting loans. "Traditionally, credit evaluation used to be all about documentation, and primarily those with salary slips and IT returns could avail a loan. Now some firms are able to do credit assessment using alternative methodologies or mechanisms for those in the informal segment," he added.
According to Harshil Mehta, CEO, DHFL India, efforts announced by the government under PMAY for economically weaker sections (EWS) and low-income groups to boost mass housing in peripheral areas with attractive interest subventions have helped a great deal. "These drivers, along with the industry's efforts to create awareness, are helping expand financial inclusion. The affordable housing segment is likely to grow at a faster pace than industry at over 25%," he added.
The PMAY scheme comes on the back of the Union budget proposals. Besides, developers who build affordable homes are exempted from paying taxes on their profits for five years starting 2016 instead of three years. These are for 300 sq ft homes in the four metro cities and 600 sq ft in non-metro areas.
A report by the investment bank CLSA states that in addition to interest subsidy, the move to allow 90% of provident fund money for home purchase is spurring demand. "While growth in the prime home loan segment could witness moderation, the affordable housing segment is likely to grow at a faster pace," said Rohit Inamdar, group head, Financial Sector Ratings.
By: Mayur Shetty & Nauzer K Bharucha
Courtesy: http://timesofindia.indiatimes.com published on June 11, 2017
Post RERA, Mumbai among 8 top cities to see dip in residential project launches, says report
As the real estate industry grapples with the new Real Estate Regulatory Act (RERA), 2016, regulations, Residential Project launches have declined by about 8 per cent over the last one year.
Residential Project launches across eight top cities, including Mumbai, Delhi-NCR, Bengaluru and Chennai, have declined by about 8 per cent between April 2016 and March 2017 compared to the same period a year ago, as the real estate industry grapples with the new Real Estate Regulatory Act (RERA), 2016, regulations, said a report by property consultants Cushman & Wakefield.
RERA was announced in March 2016. According to the report, at 25,800, the top 8 cities saw a 16 per cent dip in residential launches from the corresponding quarter. “A closer look at the trend indicates that launches have seen a steady quarter-on-quarter (Q-o-Q) decline for the past four quarters, corresponding with the announcement of the Real Estate Regulatory Act (RERA), 2016, in March last year and the demonetisation exercise in November 2016,” said the report.
The share of affordable segment in total launches improved to 30 per cent in April 2016 to March 2017 compared to 25 per cent in the same period in 2015-16. The launches in high-end and luxury segments have reduced to 11 per cent from 13 per cent in the same period.
“Launches in the residential sector are expected to remain restricted over the next two-three quarters as developers will be making intrinsic changes to their business structure, operations and marketing strategies to comply with the RERA norms. Consumers would continue to remain restrained in the first half of the year. Further, with mild change in end user sentiments due to news of downsizing in the IT / ITeS segment, the sales velocity is expected to reduce,” said Anshul Jain, managing director, India, Cushman & Wakefield.
“A gradual improvement in buyer sentiment is expected towards the second half of 2017 as the impact of real estate reforms will begin to play out in the market. Capital values that are already reduced in selected locations within markets such as Delhi-NCR, Bengaluru and Mumbai, will continue to remain under pressure in the coming quarter as the markets readjust in the post RERA and GST regime,” Jain said.
Prices have already declined in cities like Delhi-NCR and Bengaluru and select markets in Mumbai during the first quarter of 2017. Developers are now offering several lucrative packages and incentives to close deals for genuine buyers. They have launched a higher number of subvention schemes like paying 5 per cent now, 95 per cent on delivery and some developers are even offering assurances of compensation/refund of difference, if prices decline in future.
By: Express News Service
Story courtesy: http://indianexpress.com published on June 10, 2017
Home buyers, wait for GST rollout on July 1. Here’s why
After GST is implemented, a number of hidden and cascading taxes will be removed, which will help buyers, says experts.
Is it a good time to buy a house? This is the perennial question on the minds of homebuyers. But this question assumes significance as India moves to a new indirect tax regime, the Goods and Services Tax (GST) from July 1.
Experts say that buyers will benefit if they buy houses in projects launched post July 1. Though a 4.5% service tax is being replaced by a 12% GST, the advantage is that a number of hidden and cascading taxes will be removed under the new regime. Developers will also get several tax credits under GST, which experts believe will make projects launched post July 1 comparatively cheaper.
Value Added Tax and sales tax are not reflected on the invoice in most states when a consumer buys a house, but are added to the cost.
“The heavily taxed real estate sector welcomes a single stable 12% GST rate, inclusive of the value of land and with full input tax credits,” said Rajeev Talwar, CEO, DLF and chairman of National Real Estate Development Council (NAREDCO).
But these tax credits will not be applicable to projects that are under-construction, nearing completion or ones that are ready.
To allay fears over whether developers will pass on the tax credit benefits to consumers, the government has proposed anti-profiteering measures.
Many developers are offering pre-GST discounts but experts warn against them as they are allegedly ways for builders to collect money and clear dues. Reducing inventory through deep discounts is also a motivation for developers.
Builders in Noida and Greater Noida are advising existing buyers to clear their remaining property dues before July 1 to avoid a 12% GST and pay 4.6% service tax, instead.
Experts warn against such claims.
“The government has introduced anti-profiteering clauses to ensure the input tax credits that builders claim will be passed on to buyers of houses who get possession after July 1. The expectation is that the builders will extend a discount on the amount due from buyers to protect them against a 12% GST,” said Amit Bhagat, partner, indirect taxes, PwC India.
But experts and developers are divided on the impact that GST will have on the real estate sector.
“Confusion persists over the impact of GST on the different segments of housing such as luxury and affordable. But we are working closely with the government and are hopeful that initial hiccups are dealt with out once GST is implemented,” said Manoj Gaur, MD, Gaursons and vice-president of CREDAI (National). The 5-8% stamp duty charged during registration of a house will continue to be levied under GST, but developers want clarity on it.
While developers are cheering the unified tax regime that will replace the plethora of state and central levies on realty, many said that due to multiple layers of GST on land and raw materials, project costs could escalate.
By: Suchetana Ray
Courtesy: http://www.hindustantimes.com published on June 15, 2017
Six Indian cities in top 10 realty investment spots in Asia-Pacific
Real estate investment volume in the region is expected to hit $611 billion this year
Six Indian cities — including Hyderabad, Bengaluru, Pune, Mumbai, Delhi and Chennai — have found place in the top 10 emerging property investment destinations list for the Asia-Pacific.
“Most global investments this year will be made in commercial office assets. Markets in Bengaluru, Chennai, Delhi NCR, Hyderabad, Mumbai and Pune are well placed to outperform other cities from emerging economies in the Asia-Pacific,” said a report titled ‘Betting on Asia Pacific's next core cities,’ by property consultant Cushman & Wakefield.
Limited investment opportunities in safe haven core markets of Asia-Pacific have prompted investors to turn their attention to secondary and tertiary markets and even to non-core property types, said Cushman & Wakefield.
The consultant used a proprietary tool, strategic location indicator and selected the next core and emerging markets in the region that will offer investors the opportunity to tap into their long-term growth fundamentals, which will become increasingly viable due to sustained reforms.
Siddhart Goel, senior director, research services at Cushman & Wakefield, said: “Asia-Pacific remains a very viable investment target for global capital. After entering in 2005 to 2008 and having learnt many valuable lessons since, global investors are well equipped to take advantage of the potential that Indian real estate markets offer. The country is firmly on track to become an economic powerhouse, with strengthening GDP (gross domestic product), better business environment and investor-friendly policies”.
Goel said that the developments have resulted in net absorption across the top eight Indian cities to remain in the range of 32-35 million square feet in the last three years even as the share of the IT-BPM sector in commercial office leasing has steadily gone down from 65-70 per cent to 52-55 per cent during this period. “Within APAC, India is expected to continue contributing highly to the total office demand.
Consequently, global investors are increasing their capital outlays substantially as they are confident about the long-term prospects of the Indian economy in an environment of increasing transparency and accountability backed by policy reforms such as RERA, REITS, GST, Benami Transactions Act, etc,” he said.
What’s ahead in APAC?
Cushman said according to its ‘The Atlas Summary 2017’ report, real estate investment volume in the Asia-Pacific is expected to hit $611 billion this year. A total investment value of close to $136 billion in the region in the first quarter of this year, a record quarter high, and is a good indicator of health of investment in real estate in the Asia Pacific region. Pending any unforeseen circumstances in the months ahead, a positive momentum is expected to continue making a banner year for real estate investments in Asia Pacific.
By: Raghavendra Kamath
Courtesy: http://www.business-standard.com published on June 15, 2017
Delhi's CP 9th most expensive commercially
Hong Kong (Central) is the world's highest-priced office market, London's West End comes second
Connaught Place in New Delhi has been ranked the ninth-most expensive prime office market in the world -- down from seventh last year - with an occupancy cost of $153.89 per square foot per annum, according to a survey.
According to the bi-annual Global Prime Office Occupancy Costs Survey of US-based CBRE, Mumbai’s Bandra Kurla Complex (BKC) moved one notch down from 19th to 20th while the CBD (Central Business District) of Nariman Point, also in Mumbai, ranked 33rd on the list of the top 50 most expensive office markets in the world.
Global prime office occupancy costs include rent, in addition to local taxes and service charges for the highest-quality, prime office properties.
Hong Kong (Central) became the world’s highest-priced office market with an occupancy cost of $302.51 per sq foot per annum. London’s West End comes second.
Asia continues to dominate the list of the world’s most expensive office locations, accounting for seven of the top 10, according to the survey.
Hong Kong (West Kowloon) at $190.02 per square foot and Beijing (CBD) at $183.10 per square foot featured among the top five most expensive markets. Apart from New Delhi (Connaught Place), Beijing (Finance Street), Tokyo (Marunouchi/Otemachi), and Shanghai (Pudong) also featured on the top 10 list.
Global prime office occupancy costs rose 1.9 per cent year on year, which is lower than the growth rate in the year ended January-March 2016 (2.2 per cent). This was largely attributed to the slowdown in year-on-year growth in the Asia-Pacific (1.2 per cent); and Europe, the Middle East (West Asia) and Africa (0.8 per cent). On the other hand, occupancy costs in the Americas increased by 3.6 per cent year-on-year.
The top 10 list remains largely consistent, reflecting the strength of these global gateway cities in attracting and maintaining a successful occupier base.
Anshuman Magazine, chairman (India & South-East Asia), CBRE, said: “Despite the fact that Connaught Place has a limited supply of prime office space, its location in the heart of India’s capital, coupled with great infrastructure and connectivity to other parts of the city, makes it an ideal location for any business to be in. With India’s commercial real estate segment continuing to do well, prime locations across the country including Connaught Place, Bandra Kurla Complex, and Nariman Point continue to witness demand for prime office space.”
While occupancy costs continue rise steadily, coupled with low vacancy levels and a limited supply, the commercial office segment is witnessing a strategic shift. Today’s occupier, in India and around the globe, is expecting their office space to have the latest technologies and amenities in the market, according to CBRE.
"While actual office spaces are shrinking, these amenities are growing to include virtual networks, videoconferencing, and cloud storage. Going forward, technology in the workplace will define how much a corporate’s employees need the office to reach their targets. This in turn will impact the demand for office space and subsequently the associated occupancy costs," it said.
CBRE tracks occupancy costs for prime office space in 121 markets around the globe. Of the top 50 most expensive markets, 18 are in the Asia-Pacific; 20 in Europe, the Middle East and Africa; and 12 in the Americas.
By: Raghavendra Kamath
Courtesy: http://www.business-standard.com published on June 17, 2017
Engage realtors to pass GST benefit to buyers: FinMin to HUPA
The finance ministry has asked the housing and urban poverty alleviation (HUPA) ministry to sensitise states and the real estate regulator to hold consultations with developers to pass on benefits of GST to home buyers.
The tax department and states have received complaints that those who have booked flats and made part payment are being asked to make entire payment before July 1, 2017, or to face higher tax incidence for payment made thereafter.
Replying on this issue, Finance Minister Arun Jaitley said "this is wrong" and real estate developers should pass on the benefits of input tax credit to buyers or else they would have to face action under anti-profiteering rules.
Revenue Secretary Hasmukh Adhia has written to HUPA secretary and asked him to sensitise all the states as well as the regulator under the Real Estate (Regulation and Development) Act, 2016 (RERA).
"We have requested the HUPA secretary to hold meetings with real estate developers associations and make them understand," Adhia told reporters here.
Construction of flats, complex, buildings will attract a 12 per cent goods and services tax (GST) compared to about 11 per cent tax, which includes excise duty, VAT and service tax.
Jaitley said the real estate builder will enjoy the benefit of input credit, which will be deducted from tax liability.
"The lowered tax liability should lead to price reduction. The price reduction has to be be passed on to the customer," Jaitley said.
Asked if the anti-profiteering rules will apply if the home builder fails to pass on benefit, the minister said: "Anti-profiteering rules can apply. But we want to use the anti-profiteering rule as a deterrent. I hope we are not compelled to use it."
The GST Council, chaired by Jaitley and comprising state finance ministers, today cleared the anti-profiteering rules.
As per the rules, if the Directorate General of Safeguards (DGS) after investigation finds that the benefit of price reduction has not been passed to consumers, the anti- profiteering authority will ask the business to refund the same to the consumers.
By: Raghavendra Kamath
Courtesy: http://www.dnaindia.com published on June 18, 2017
Don’t ask buyers to pay before July 1, builders warned
NEW DELHI: It is illegal for builders to ask buyers of unfinished realty projects including flats to make full advance payment to avoid paying higher taxes after GST kicks in, Union housing minister M Venkaiah Naidu has said.
He has asked all chief ministers and builders' associations to ensure developers don't charge higher taxes from home buyers after the goods and services taxes comes into effect from July 1.
The minister has also said that since the GST regime will bring down the overall tax for real estate projects in comparison to the present taxes, the builders must pass on the benefit to consumers.
In his letters addressed to all chief ministers, Naidu has said, "It is expected that the builders will pass on the benefits of lower tax burden as result of GST to the buyers in the form of reduced prices/ installments. Hence, I would like to request the state government as well as builders' associations to ensure that no builder/ construction company ask customers to pay higher tax rate on installments to be received after the imposition of GST."
This comes barely days after the finance ministry warned builders of stringent action if they are found asking buyers to make the entire payment for any housing unit before the GST roll out. It said that if any builder resorts to such practices, it can be deemed to be profiteering under the GST law. In fact, Naidu has also referred to a communication from the revenue department.
The department has mentioned that various representations and complaints had been received by states and the Central Board on Excise and Customs highlighting the builders ploy to get the entire money even before handing over flats.
Referring to the revenue department's communication, Naidu said the full input credit would be available for offsetting the headline rate of 12% proposed under GST.
By: Dipak K Dash
Courtesy: http://timesofindia.indiatimes.com published on June 22, 2017
Will the Navi Mumbai International Airport impact property prices in the region?
The 5 key micro-markets that are likely to gain due to the coming up of the NMIA are Ulwe, Kamothe, Kharghar, Taloja and Panvel. The prices in these regions have seen less than 4 percent appreciation over the last 3 years.
After 14 years of delay, the Navi Mumbai International Airport (NMIA) is finally off the ground. The pre-development work for the Rs 16,000-crore project has begun. The City and Industrial Development Corporation or CIDCO has managed to acquire most of the land. The nodal agency CIDCO has already started the construction of temporary roads to the reclamation site.
The final environmental clearance came in April and the Maharashtra government has put the project on fast track. The first tranche of work involving flattening of the Ulwe hill and changing the course of the Ulwe river has begun and CIDCO hopes to finish this leg of work in 18 months.
CIDCO also claims to have ironed out the last hurdle or disputes with Project Affected People (PAP) from 10 villages.
“I don’t think there is any major problem of PAPs which is left unresolved. CIDCO has handled everything on a priority. They have been given a timeline to settle all their issues by June 30. Therefore, with regards to this we don’t see any of kind of major issues. There could be some minor personal issues which can be resolved across the table over a period of time”, says Sanjay Chaudhari, Chief Engineer, NMIA, CIDCO.
With the major problem of land acquisition sorted, CIDCO expects to finish the first phase of the airport by 2019. This is very important for the Mumbai region as it’s really in need for a second airport. Its existing airport is already reaching a saturation point, handling 40 million passengers annually. This new Navi Mumbai airport is expected to add a capacity of 60 million passengers. This means Greater Mumbai will be able to handle 100 million passengers by 2033.
Cashing in on the international airport CIDCO has some ambitious plans for Navi Mumbai as well. A 100 hectares corporate park will be developed in the Kharghar region on the lines of BKC, hoping to attract both investments and corporate occupiers. Dampened real estate sentiments have already started seeing some revival, say industry players.
“We are happy that finally the ground work for NMIA has begun. This will improve the sentiments in the market and we are expecting a spike in enquires. There is a possibility of 10-15 percent increase in the prices”, says Manohar Shroff, Vice-President, MCHI-CREDAI, Navi Mumbai Unit.
The five key micro-markets that are likely to benefit due to the coming up of the NMIA are Ulwe, Kamothe, Kharghar, Taloja and Panvel. The prices in these regions have seen less than 4 percent appreciation over the last 3 years.
According to experts, there is already an inventory overhang of 2,400 unsold units in the Navi Mumbai region. Out of these around 2,000 units are ready to move in and yet there are no takers.
With airport seeing light of day soon these regions are set to see a better growth. But experts advise some caution before investing into these nodes.
“Although with the coming up of the airport several nodes are going to benefit, some of the nodes do not have necessary infrastructure. This means it is not the best area for the end users to immediately move in. Success of the real estate development in these nodes purely depends on what kind of infrastructure CIDO provides in the region, says Ashutosh Limaye National Director, Research, JLL.
Clearly, a lot is dependent on the fate of the Navi Mumbai airport. With GVK having won the bid for developing this project and CM’s office keeping a close eye on the progress, one is a lot more hopeful this time around, that the first flight should take off from the new airport, by 2019.
Courtesy: http://www.moneycontrol.com published on June 22, 2017
GST impact on real estate: Will new tax system bring property prices down?
After demonetisation, the Real Estate (Regulation and Development) Act or RERA is being enforced to realise the 'housing for all' initiative by the government, and the implementation of the upcoming Goods and Services Tax (GST) will further streamline the real estate segment in India. GST is designed to encourage transparency and ease of doing business in the realty sector, but whether it will bring down property prices or not, is still debatable.
If we look at the current tax levels, these include 4.5 per cent service tax (with input tax set off available) plus 1 per cent value-added tax or VAT (in Maharashtra, without any set-off benefits). In the GST regime, the tax on under-construction projects will be 12 per cent. On the face of it, there is an increase of 6.5 per cent regarding the tax payable by apartment purchasers. However, there is the option of getting full input tax set off on all input side if GST is paid.
It is expected that the net effect of the credit set off benefit will leave the overall tax revenue to the government as neutral. However, the entire concept of GST is that the final consumer bears the overall tax and compared to the earlier regime, the tax rate to the end consumer is much higher. It is likely to lead to a reduction in the per-square-foot rate quoted by developers (since they will be able to get the benefit of input tax credit). On the other hand, the total cost to the end consumer may change slightly depending on the actual specifications, location and other details of the project.
However, GST is not applicable to ready-to-move-in properties. As a result, developers will either have to bear the tax burden since it cannot be passed on to end consumers or prices of apartments, which are ready for possession, will increase in step with the taxes. Again, it will lead to a change in the quoted price by the developer, but the overall cost to the end customer will stay largely unchanged.
Unfortunately, the government has not addressed the aspect of stamp duty, which continues to be extremely high for land and apartment sales. There is no input tax set off available for the stamp duty paid for the land, and this goes against the basic concept of GST. Hopefully, it will be addressed by various state governments shortly.
Never before in the history of the country, so many changes have taken place at the same time to impact the real estate sector. Demonetisation, RERA and GST are all critical changes, but when all of these are implemented within a period of eight months, it is nothing short of a tsunami for the entire sector.
Consequently, developers have to rethink their entire approach to business. For a long time, many developers followed the business model whereby profit was made by shortchanging customers, constructing houses illegally and using customers' money without returning any value to them. Promises made to customers were not intended to be kept or at least, that was the norm. All this will change when developers are forced to define in writing what they will give to the homebuyers and by when it will be provided.
The option of selling apartments without approvals is no longer available, and the capital requirements (for developers) will also go up. An industry, which has, for a long time, seen people with very little capital take up large projects, will have to change its current practices. Of course, all this would be excellent news for homebuyers. (Rohit Gera is Managing Director, Gera Developments, and Vice President, CREDAI-Pune Metro)
By: Rohit Gera
Courtesy: http://www.businesstoday.in published on June 27, 2017
Real estate developers go slow on REITs
But, overall conditions are quite positive for REITs, says CEO of Embassy Corporate Park
MUMBAI, JUNE 28: As the first Infrastructure Investment Trust (InvIT) got listed recently, the real estate sector is yet to leverage Real Estate Investment Trusts (REITs) despite both having been conceptualised by the Securities and Exchange Board of India in 2014.
Even though players such as DLF, Blackstone, Embassy Group, K Raheja Corp, and RMZ had indicated that their REITs may become reality by mid-2017, it may still be sometime away, industry analysts and investment bankers say. They add, though, that one or two REITs might get listed by end of this year.
“The bigger and complex the portfolio is, the longer will be the time taken to list a REIT. We expect the first REIT to take shape not before the end of the calendar year.
“But having said that, the overall conditions are quite positive for REITs,” Mike Holland, CEO, Embassy Corporate Park, told BusinessLine.
Embassy Corporate Park was among few other players who filed an application with SEBI seeking an in-principle approval to register its REIT last year.
REITs are investment vehicles that can be used by real estate players to attract private investments while investors are able to get dividends generated from income-producing real estate assets such as office buildings, shopping malls, apartments, warehouses and mortgages.
'Entry & exit vehicle'
“While on one hand REIT would help developers unlock value from their leased out assets and generate much needed capital, it would also provide a much-needed entry and exit vehicle for the global institutional investors looking to invest in non-residential real estate assets in India,” Rajeev Bairathi, ED and Head - Capital Markets, Knight Frank India, said.
“Last year has seen a considerable easing up of Indian REIT regulations — it’s time for investors, developers and owners to get in on the REIT action. It appears that, now, the REIT way is the right way,” Ameet Hariani, Founding & Managing Partner, Hariani & Co, told BusinessLine.
However, some industry sources suggest that for many real estate players meeting SEBI’s compliance and disclosure rules could still be challenging — hence, the delay in first REITs hitting the market. Industry watchers also note that capital gains tax and issues relating to stamp duty are major concern areas for prospective developers wishing to use REIT as an investment vehicle.
It is estimated that approximately $121 billion or 1.73 billion sq ft of occupied commercial real estate across office, retail and warehouse segments could potentially benefit from the REIT opportunity. A recent KPMG, NAREDCO and Knight Frank report said India has a rent-yielding office inventory of 537 million sq ft worth more than $70 billion.
According to Grant Thornton’s Indian Real Estate Sector Annual Handbook 2017, the ready commercial space eligible for REIT investments amounts to 277 million sq ft, accounting for 44 per cent of total office stock in India. The REIT-eligible commercial office stock is estimated to have a total value of $44-53 billion. In retail assets, the estimated value of REIT-eligible stock (completed and under-construction malls) is around $20-24 billion.
“With over 100 million sq ft of Grade A commercial real estate built to international standards with marquee tenants and long lease profiles, India now has the ingredients in place for a REIT market, and the motivation for holders of these assets to look to the public markets as an option to raise capital and monetise investments,” Samarth Jagnani, an executive director in Morgan Stanley’s Global Capital Markets group, based in Mumbai, told BusinessLine.
However, Sandeep Singh, Senior Director — Structured Finance, India Ratings & Research, says commercial real estate in India has already attracted significant private equity interest in the last couple of years, which reduces compulsion for real estate developers to go and seek listing of a REIT, unlike in infrastructure sector.
According to PwC, the total investment made by PE funds in the real estate sector was around ?25,680 crore in 2015, which is nearly 72 per cent higher than that recorded in the previous year and the highest ever annual investment recorded in the sector in rupee terms since 2008.
By: KSENIA KONDRATIEVA / BINDU D MENON
Courtesy: http://www.thehindubusinessline.com published on June 28, 2017
Realty check: Mumbai builders’ unsold inventory worth whopping Rs 2.5 lakh crore
After government’s demonetisation move the real estate market has been hit with huge losses, as the investment declined by almost 50 per cent. But when the real estate sector was gaining, this market was again hit by a surgical strike by the government, that is the Real Estate Act, or better known as RERA. But the latest reports have shown that there around 1 lakh unsold apartments over the past in Mumbai Metropolitan Region (MMR), which takes the total unsold inventory to Rs 2.5 lakh crore.
According to a Financial Express report, the apartments which are unsold are priced between Rs 90-95 lakh, for which, seeing today’s monetary conditions, there not many takers. There was anticipation that the prices of real estate will drop down following the RERA or Real Estate (Regulation and Development) Act, but people were disappointed with no relief in apartments prices.
Pankaj Kapoor, MD, Liases Foras told Financial Express, “At the current pace, it could take nearly five years to clear the unsold stock.”
According to Liases Foras data, even small and medium-sized apartments up to 1,000 sq ft burn a hole in the buyer’s pocket with the cost being Rs 13,000 per sq ft. Nonetheless, builders pushed property sales before RERA rollout and about 8,000 more properties were sold in FY17 than FY16.
But, with RERA expected to cut down on delays by bringing in more accountability, buyers are more inclined towards the more reasonably priced under-construction projects.
Previously, lengthy delays in completion of buildings used to drive people to buy apartments which were ready to move in. But, as RERA is supposed to cut down on delays, buyers might go for under-construction projects which are generally priced at a lower level.
By: FPJ Web Desk
Courtesy: http://www.freepressjournal.in/ published on July 04, 2017
GST rates: Real estate firms gear up to pass on tax benefits to home buyers
Depending on stage of construction and location, home prices may either see a correction of up to 3% or inch up a bit due to GST
Mumbai: Real estate firms are gearing up to pass on tax benefits to homebuyers under the goods and services tax (GST) regime, which could lead to marginal changes in property prices. Depending on the stage of construction and location, home prices may either see a correction of up to 3% or inch up a bit from current levels, say property advisers and developers.
However, prices of ready-to-move-in apartments with completion certificates would remain steady as these properties are out of the GST ambit. Any price change in the segment will depend purely on demand and supply, say sector experts.
On 1 July, Mumbai-based property developer Oberoi Realty Ltd launched a marketing campaign called “Zero GST Impact”, cashing in on the uncertainty over how the new tax rate may affect property prices. The company kept the earlier tax rate for the first 100 bookings in six of its under construction projects following the GST rollout.
Oberoi Realty managing director Vikas Oberoi clarified that buying homes would not become more expensive after the application of GST as the company plans to pass on tax benefits to both existing and new customers.
Under the new tax structure, buying under-construction properties will attract a net effective rate of 12% as against the earlier rate of around 5.5% (including value-added tax and service tax). However, due to the input credit benefits that most builders will get on the key raw materials they buy, the base price may go down.
“We have done our math and we clearly believe that GST is not going to increase cost to customers. If we read the finer details, the input credit takes care of the GST that is required to be paid. If everyone plays fair, home prices will mostly be cost neutral or may go up just about 2-3% in (a) few projects,” Oberoi said.
Others also believe that prices of ongoing projects may see a slight correction of about 1-3% post deduction of input credits, depending on location and stage of construction.
“For new projects with 100% input credit passed to buyer and land cost being 50% of project cost, we expect property price to fall by around 1% in western and northern markets and around 3% in southern markets,” said a 30 June report by Edelweiss Securities Ltd, a brokerage firm.
Om Ahuja, chief executive (residential) of Bengaluru-based Brigade Enterprises Ltd, said homebuyers could save about 3-4% post GST, depending on savings of builders on key components such as steel and cement.
The company is also currently running a campaign where it has cut prices across 22 ongoing residential projects in Bengaluru, Chennai and Hyderabad.
“For our new bookings, we are currently working on how we can pass on the benefits to consumers. Wherever there is visibility of some saving, we have already passed on. We are currently running an offer where we have slashed prices across few projects,” Ahuja said. However, he added that challenges remain on how to rework contracts with existing customers who have paid partly for under-construction projects.
On 15 June, the Central Board of Excise and Customs (CBEC) asked all builders to pass “on lower tax burden under GST regime to buyers of property by way of reduced prices/instalments”.
“The impact on prices will differ for different projects and how much credit a builder can take or not take. Suppose if 90% construction has happened and the builders have already purchased the material, he may not get the credit on that,” said Abhishek Jain, partner, Ernst and Young, a consultancy.
According to Pankaj Kapoor, managing director of Liases Foras, a real estate advisory firm, luxury housing prices will rise while affordable and low-cost housing will not see any impact. “Luxury housing has a bigger component of land price. Input credit will not be sufficient enough to bring down the price,” said Kapoor.
DLF Ltd, India’s largest real estate firm by market value, is also planning to pass on benefits of the input credits it will get on its under-construction projects. However, any price change will be determined by the market rather than GST, said Rajeev Talwar, DLF’s chief executive officer.
“Every builder has to pass on the benefit that they get through input credits. But we need to wait for another six months to see how the market moves based on these reforms to see a price change,” he added.
Santosh Agarwal, chief financial officer of Gurugram-based Alpha Corp Development Pvt. Ltd, said customers who buy apartments in projects which are less than 60% completed will get more benefit as against those that are near completion due to the higher input credit which builders may get in early stages of construction.
By: Bidya Sapam
Courtesy: http://www.livemint.com published on July 05, 2017
Hyderabad realty sees mixed trends
Project launches hit due to ambiguity in RERA
HYDERABAD: The real estate sector in Hyderabad sees mixed trends. While demand for office space is higher than availability of inventory, prices continue to rule steady while rentals firm up.
There has been a slowdown in new project launches due to uncertainty over implementation of Real Estate (Regulation & Development) Act (RERA) 2016.
Consultancy firm Knight Frank India in its report on Hyderabad realty market finds new launches hit an all time low at just over 2500 units during the first half of 2017. Compared to H1 and H2 2016, new launches were down 55 per cent and 56 per cent respectively, it said.
In its report on India Real Estate for the first half ended June 2017, it mentions how lack of clarity on the implementation of RERA in the State has emerged as a major factor dampening new launches in Hyderabad.
Steady sales trend
While the sales remained steady during the first half of 2017, prices too continue to rule steady and expected to do so in the near future too.
Making a detailed presentation on the real estate sector, Gulam Zia, Executive Director, Knight Frank India and Samson Arthur, Branch Director, highlighted that bulk of the launches are in relatively higher priced segment and that too in the Western part of the city.
The Western part of the city continues to over 80 per cent of the total launches in first half of 2017, nearly 69 per cent of the home sales took place in the West.
With the number of launches coming down and steady sales in the current unsold inventory, it will take less than two years to exhaust the available stock.
Uncertainty in new launches
While about 19-20 States have announced their decision to adopt RERA, the uncertainty in Telangana is putting off developers from launching new projects.
Asked about the impact of the GST on the real estate sector, they said it is still being analysed how it will impact the sector.
Office space market
Hyderabad office market witnessed a drop of 44 per cent in new project completion in H1 2017 as against H1 2016. The vacancy level in sought after locations is about 2-4 per cent.
The IT and ITES sector dips to 51 per cent in H1 2017 due to lack of availability of quality IT spaces. There has been increase in demand from BFSI and other services sector. The rentals have seen a growth of 14 per cent year on year.
By: V Rishi Kumar
Courtesy: http://www.thehindubusinessline.com published on July 06, 2017
After 2 months, Karnataka cabinet finally clears RERA
BENGALURU: After dragging its feet for nearly two months over implementing the Real Estate (Regulation and Development) Act (RERA), the state cabinet on Wednesday approved the rules to be notified under RERA.
Two major changes are ongoing projects where 60% of work has been completed will not be brought under the purview of the legislation, and the cost of the project will be determined on the basis of the prevailing guidance value.
With regard to allegations that the state government, despite being the first in the country to come up with draft rules, had resorted to delaying tactics in notifying the final rules, law minister TB Jayachandra said: "There has been delay in notifying the final rules because of extensive consultations." The new rules will be notified in two or three days," the law minister said.
The minister, however, evaded questions on the rationale behind excluding projects where 60 per cent of the work has been completed. "Everything will become clear after the rules are notified," he said.
Sources, however, maintained there was tremendous pressure on the government from the builders' lobby, apparently backed by several ministers, to go slow on RERA.
"The rules approved by the cabinet are against the original act. Excluding projects where 60% construction completed is clear dilution of Section 3. This 60% completion level can be manipulated by developers and most ongoing projects will be kept out of RERA ambit. This kind of a dilution was not expected. The core group members are meeting on Saturday to chalk out our next course of legal action," said M S Shankar, convener, Fight for RERA, Karnataka chapter.
Courtesy: http://timesofindia.indiatimes.com published on July 06, 2017
Goldman Sachs may invest Rs300 crore in Ozone Group’s real estate project
Goldman Sachs is evaluating both residential and commercial real estate assets of Ozone Group, and will invest in at least one project
Mumbai: Investment bank Goldman Sachs is planning to invest as much as $50 million (about Rs325 crore) in a real estate project of Ozone Group, a Bengaluru-based developer, two people aware of the matter said.
“The talks are at an initial stage. They are evaluating both residential and commercial real estate assets of the developer. They are likely to make an investment in at least one of Ozone’s projects,” the first of the two people said.
A second person aware of the development said Goldman could invest up to $50 million in this transaction.
Both Ozone Group and Goldman Sachs declined to comment. Ozone has in the past raised significant sums of capital in the form of structured credit to fund its projects as well as to provide exits to earlier investors in its projects.
Last year, it raised Rs360 crore from Piramal Fund Management Pvt. Ltd for its 150-acre mixed-use Urbana township project in north Bengaluru, to refinance existing loans, Mint reported.
The funds raised also helped the developer give a full exit to Urban Infrastructure Venture Capital Ltd from the project, and a partial exit from its entity-level investment in the developer.
Earlier in 2015, Ozone had raised Rs575 crore from Piramal for the Urbana project refinance loans and to speed up construction.
Ozone’s Urbana is a 150-acre township, which will have 20,000 homes on completion. The township will also have a 2 million sq. ft information technology (IT) park and 300,000 sq. ft of retail space along with a school and a hospital.
Ozone is also developing a 45-acre township Metrozone in Chennai and has launched a premium residential project in Mumbai’s Santacruz. It is also working on three new projects in Bengaluru.
In recent years, Goldman Sachs has made large bets in Indian real estate. In May 2015, it tied up with Nitesh Estates Ltd to jointly invest $250 million in buying income generating assets. As part of this, Goldman invested $37 million in purchasing a 1 million sq. ft shopping centre in Pune.
Also in 2015, the American firm invested Rs900 crore in Piramal Realty for a minority stake to help Piramal buy properties in and around Mumbai. Goldman’s investment in Piramal Realty came a month after the Mumbai-based developer raised Rs1,800 crore from private equity firm Warburg Pincus.
According to Bain & Co.’s India Private Equity report, investment in the Indian real estate sector slowed to $1.1 billion in 2016, after witnessing a high of $3.9 billion in 2015.
Apart from real estate, Goldman is also actively scouting for investments in other sectors.
In an interview with Mint last month, Ankur Sahu, co-head of merchant banking division (Asia-Pacific) at Goldman Sachs said that the firm expects to invest up to $1 billion in India over the next 3-4 years.
The firm is also exploring opportunities to buy distressed assets, which can be turned around, he added.
By: Swaraj Singh Dhanjal
Courtesy: http://www.livemint.com published on July 10, 2017
Demonetisation didn’t have much impact on India’s real estate sector: Govt data
The housing sector grew at a compounded rate of 18% to 19% after the government scrapped two high-value banknotes, which accounted for 86% of the cash in circulation
Prices of under-construction residential properties in Delhi, its next-door neighbour Faridabad, Patna, Nashik and Chandigarh have witnessed the maximum fall in the first quarter of 2017 over the previous quarter, data released on Monday by the National Housing Bank’s (NHB) Residex revealed.
However, contrary to perception, the government’s demonetisation drive in November last year does not seem to have much of an impact on India’s fast-growing real estate sector.
In 24 of the 47 cities surveyed, there was an upward movement in prices of residential properties over the previous quarter ending December 2016.
The maximum increase was observed in 7 cities -- Jaipur (8.7%) followed by Chennai (6.5%), Lucknow (5.7%), Guwahati (5.2%), Howrah (5.0%), Hyderabad (4.4%) and Bidhannagar (4.1%).
“The price indices for the last quarter of last financial year i.e 2016-17 proved wrong the critics of demonetisation who said that economy will take a hit,” Union housing and Urban affairs minister M Venkaiah Naidu said while releasing the Residex, which tracks home prices.
Minister Naidu said that National Housing Bank also collected data on land prices, which showed that a correction in land prices is taking place which again reflects the declining trend in transactions of unaccounted money. A subsidiary of the Reserve Bank of India, the NHB regulates housing finance companies such as HDFC and LIC Housing Finance.
Of the 47 cities that were surveyed, market prices of under-construction properties in another 14 cities have also shown a decline over the previous quarter.
The housing sector grew at a compounded rate of 18% to 19% after the government scrapped two high-value banknotes, which accounted for 86% of the cash in circulation.
Cash deals in real estate crimped after the government capped the transaction limit at Rs 2 lakh, making it difficult to buy high-end properties.
By: Moushumi Das Gupta
Courtesy: http://www.hindustantimes.com published on July 10, 2017
Is the affordable housing euphoria overdone?
The affordable housing market is fragmented with scores of developers; those with weak financials may even wind up operations
The BSE Realty index has been moving up sharply in the last few months. One reason, of course, is that realty stocks had been really battered earlier and the market is clutching at the hope that the government’s affordable housing initiative will help the sector pick itself up.
Realty consultant and adviser Knight Frank India Pvt. Ltd, in a research report, has highlighted a visible surge in affordable housing projects. Across eight large cities, homes priced below Rs50 lakh comprised about 71% of the total launches between January and June 2017, significantly up from 52% in the corresponding period in 2016. But the moot question is: does this merit such a big leap in the realty share prices?
Over a year, front-rung stocks like Oberoi Realty Ltd, Sobha Ltd and Godrej Properties Ltd have run up. Although there has been an increase in residential unit sales in the last two quarters in some regions, one must note that there is considerable unsold inventory in the system. This would weigh on realty prices and on realizations. Further, these companies may consider tapping the affordable housing market opportunity to ramp up revenue, but they are not in the fray yet.
Meanwhile, what’s more glaring is the rally in the shares of small developers like Peninsula Land Ltd, Poddar Housing and Development Ltd, Arihant Superstructures Ltd and Ashiana Housing Ltd. Investors would do well to tread cautiously, as so far most of these firms have shown erratic revenue growth. Some like Ashiana Housing and Poddar Housing even posted a revenue contraction in the March quarter and they have to align their operations with the stringent Real Estate (Regulation and Development) Act (RERA), 2016, enforced from 1 May 2017.
Moreover, the affordable housing market is fragmented with scores of developers. Those with weak financials may even wind up operations as the cost of compliance with the new regulations may be high. For example, according to Shubhranshu Pani, managing director (strategic consulting) at property consultancy Jones Lang LaSalle (JLL) India, only 315 of the 15,000 projects in Maharashtra have registered under RERA. “I expect a huge rush of projects being registered closer to July end,” he said.
Some states have not yet announced the guidelines, which in turn could slow the pace of launches in the near term. This is not all. Tax increases and greater clarity on input tax credit post-goods and services tax would dampen sales for some time to come.
Further, JLL India in it monthly real estate report also says that with job losses looming over the information technology/IT enabled services and financial services industries, demand for residential realty across hubs of Bengaluru, Hyderbad, Pune, Navi Mumbai and Noida may be affected. In other words, a marginal growth in sales reported by a handful of promoters should not be mistaken for a comeback in earnings growth of realty firms.
By: Vatsala Kamat
Courtesy: http://www.livemint.com published on July 14, 2017
Blackstone in talks to buy $525 million IL&FS real estate fund
Private equity firm Blackstone may buy ILFS India Realty Fund I owned by IL&FS Investment Managers Ltd
The Blackstone Group Lp, the US-based global private equity firm, is in talks to acquire ILFS India Realty Fund I, a $525 million real estate fund owned by IL&FS Investment Managers Ltd (IIML), two persons aware of the development said. IIML is a unit of Infrastructure Leasing & Financial Services Ltd (IL&FS).
The deal will be signed through Blackstone India Real Estate Advisors, the Indian realty arm of the New York-based Blackstone.
Blackstone is a leading owner of office space in India, spanning over 30 million square feet across all major cities.
ILFS India Realty Fund I, one of the first real estate focused funds in India, was launched in 2005. It made about 17 investments, out of which it exited six portfolios.
Major portfolios of ILFS India Realty Fund I include ETL Infrastructure Services Ltd, ($48 million invested in 2006) and QVC Realty Ltd. ($100 million invested in 2008).
Jones Lang LaSalle (JLL) India advises ILFS to sell the realty fund, the first person mentioned above said on condition of anonymity.
ILFS India Realty Fund II, with a corpus of $895 million, was raised in 2007 and has invested in 28 portfolio companies including Kohinoor CTNL Infrastructure Company Ltd and GK Industrial Park Pvt Ltd.
The major portfoilos of IL&FS real estate funds include Gurugram-based Ansal Esencia, Chennai-based Pacifica Aurum, Bengaluru-based Phoenix Market City and Bhartiya City, Mumbai-based Indiabulls Blu, Wadhwa Address and Pune’s Amanora Towers.
A present, IIML has six real estate funds with about $2 billion under management and commitments aggregating $1.8 billion in 74 transactions across India.
Spokespersons at Blackstone and IL&FS declined to comment.
“When the first fund is on an exit mode, it would be ideal for IL&FS to sell all the portfolios in a single deal,” said the second person mentioned above, also on condition of anonymity.
Several of IL&FS real estate funds are in exit mode - including the $117-million IL&FS Milestone Fund I and $103-million Saffron India Real Estate Fund I. Both were launched in 2008.
In 2015, Blackstone entered into an agreement with IL&FS Milestone Fund, whereby Blackstone acquired 74% stake owned by IL&FS in 247 Corporate Park, in Mumbai’s eastern suburbs. Hindustan Construction Company Ltd owned 26% in 247 Corporate Park.
Blackstone has invested about $3 billion in real estate projects in India across 20 transactions and manages the largest portfolio of office parks in India.
Blackstone opened its real estate division in India in 2007, hiring Tuhin Parikh as senior managing director. Parikh, a former chief executive of TCG Urban Infrastructure Holdings Ltd., a national level office developer and asset owner in India, has strengthened Blackstone’s India presence through buying several office assets and malls across the country since 2011.
In one of the largest real estate investments, Blackstone had in 2014 acquired a 50% stake in Bengaluru-based Embassy Holding Company which owns 20.9 million square feet across three Class A office parks in India.
Blackstone is also acquiring a 15% stake in K Raheja Corp’s, commercial real estate business for around $250 million. Blackstone plans to float two separate real estate investment trusts (REITs) for its office assets with its partners- Embassy Group and Pune-based Panchshil Realty.
Besides its investments in office space, Blackstone Group has widened its footprint in India through a series buyouts of shopping malls. Last year, it acquired a 50% stake in Westend Mall in Pune, which houses brands such as Cinepolis, H&M, Max, Shoppers Stop and Starbucks. It had acquired L&T Seawoods Mall in Navi Mumbai from L&T Realty, last year. In 2015, it bought two AlphaOne malls in Amritsar and Ahmedabad from Alpha G:Corp. It is in discussions to acquire Elante mall from Carnival Group in Chandigarh.
Blackstone LP, one of the largest owners of office space in India, is readying a new Asia-focused real estate fund that aims to raise a record $5 billion or more, betting on strong returns from property investments in the region, according to a January report by Reuters.
The world’s biggest alternative asset manager will likely launch the fund in the next 12-16 months, and it has invested more than 70% of the $5.08 billion it raised in its first Asia-focused property fund, Reuters said.
According to a 2016 report by JLL India, private equity investments in Indian real estate in 2016 increased by 62% to Rs38,000 crore as compared to Rs23,500 crore in 2015, out of which Rs13,500 crore was invested through pure equity while the rest was through structured debt.
The year 2017 is expected to be one of fructification, when the results of all regulatory and policy initiatives taken in 2016 begin to take shape. Most key initiatives, such as the Real Estate Regulatory Authority (RERA), the Goods & Services Tax (GST) and Real Estate Investment Trusts (REITs) are primarily aimed at improving transparency and boosting investor confidence in India’s real estate sector at large, said a June 2017 JLL India report.
“In anticipation of the first REIT listing in 2017, institutional investments in corporate real estate are likely to remain positive. Inflows into commercial office assets in 2017 are expected to rise above Rs20,000 crore ($3 billion), on the back of healthy investor interest in leased office assets,” said the report—Return of the Investor.
By: Reghu Balakrishnan
Courtesy: http://www.livemint.com published on July 14, 2017
Land deals pick up pace amid falling prices, rising distress
Delhi NCR, where land values have dropped by 30-40%, may be the worst impacted by the real estate slowdown, but that hasn’t deterred buyers
Bengaluru: As land prices fall and distressed assets rise, land deals are picking up pace. Large developers from Mumbai and Bengaluru, particularly those backed by institutional investors, are actively scouting for land parcels, mostly to build commercial offices and industrial warehouses, but also distressed residential parcels at lower valuations.
India’s largest property market, National Capital Region (NCR), where land values have dropped by 30-40%, may be the worst impacted by the real estate slowdown, but that hasn’t deterred buyers.
Mumbai-based Godrej Properties Ltd signed up for land parcels—three in NCR and one in Bengaluru—between April and July. These were a mix of outright buys and joint development deals. The latest was a 14.8 acre land in Dwarka Expressway from BPTP it bought under the Godrej Residential Investment Program II (GRIP-II), a $275 million fund.
“Land prices have corrected, particularly in NCR and there are lots of opportunities for outright buys. There are developers who are selling because of liquidity issues but the expectations are now realistic. It’s a buyer’s market,” said Mohit Malhotra, managing director and chief executive, Godrej Properties. The developer is looking at more land in Mumbai, NCR, Pune and Bengaluru.
In one of the largest land deals this year, a joint venture of Tata Realty and Infrastructure Ltd (TRIL) and Standard Chartered Private Equity acquired a 47.5 acre plot at the Thane-Belapur industrial area, near Mumbai for Rs325 crore.
Bengaluru-based Salarpuria Sattva Group, which bought a land parcel in Hitec City, Hyderabad from BPTP for around Rs200-250 crore this year, is in the process of closing two more deals in Bengaluru. “There are large corporate houses, who need cash flows and want to exit certain assets and other developers who are unable to develop the projects and want to sell off the land,” said Bijay Agarwal, managing director, Salarpuria Sattva Group.
Land prices are dropping except in Hyderabad, where it has risen.
“There has been a steady decline in land prices, which have dropped to 30-40% in NCR. Interestingly, NCR developers have always believed in building land banks. But due to market conditions, they are unlocking value either by selling or entering into partnerships with better placed developers,” said Santhosh Kumar, chief executive officer-operations at property advisory JLL India. Firms in affordable housing, warehousing and logistics and commercial office development are the ones who are most active buyers in the market today.
Tata Housing Development Co. Ltd said it has aggressive growth plans for both affordable and luxury housing projects in the next 2-3 years. It is exploring 8-10 deals across the top 10 cities at any given time and expects to close 4-5 deals by the end of December.
“Though land valuations have come off their all-time high, they are still on the higher side. We expect the market to remain stagnant for couple of quarters and land prices should soften a little more in near future,” said Brotin Banerjee, CEO and managing director of Tata Housing.
In warehousing and logistics, Embassy Industrial Parks Pvt. Ltd (partnership of Embassy Group and Warburg Pincus) is looking to buy large tracts of land while Hiranandani Communities wants to buy land in Pune, Chennai and Nashik for its new industrial park business.
By: Madhurima Nandy
Courtesy: http://www.livemint.com published on July 17, 2017
RERA warns builders of action for late registration
As of July 14, 500 projects stood to be registered with RERA along with 3,500 brokers having registered with Maha RERA. The number of 500 registered projects has not worried officials from Maha RERA, who anticipate that builders will come for registering at the nick of the time. Maharashtra Real Estate Regulatory Authority (RERA) clarified that it can take suo motu action against builders who don't register their projects with the authority by the deadline of July 31.
Builders and brokers were given three months, starting May 1 up to July 31, to register all ongoing projects with RERA. We can even take suo motu action against builders who fail to register their projects after the deadline of July 31, on mere intimation about the same," said Vasant Prabhu, secretary, Maha RERA.
Maharashtra Real Estate Regulatory Authority (RERA) clarified that it can take suo motu action against builders who don't register their projects with the authority by the deadline of July 31. While complainants needs to pay a fee of Rs 5,000 to register a complaint against builders; according to the law, the regulatory authority has said that post July 31, even if an individual brings into its notice non-registered projects, Maha RERA can initiate suo motu action against the particular builder.
"It is not necessary that every complaint we act on, has to be a formal complaint by a concerned buyer via paying the complaint fees. We can even take suo motu action against builders who fail to register their projects after the deadline of July 31, on mere intimation about the same," said Vasant Prabhu, secretary, Maha RERA. "However, we are expecting all the builders to register their projects within the deadline or else we will fine the concerned builders according to the provisions of the RERA Act," he added. According to RERA, if any builder fails to register their project as per the RERA Act, he shall be liable to a penalty, which may extend up to 10 per cent of the estimated cost of the real estate project.
On continued violation, he shall be punishable with imprisonment for a term, which may extend up to three years. Builders and brokers were given three months, starting May 1 up to July 31, to register all ongoing projects with RERA.
As of July 14, 500 projects stood to be registered with RERA along with 3,500 brokers having registered with Maha RERA.
However, it is said that roughly 9,500 projects are ongoing in the state. The number of 500 registered projects has not worried officials from Maha RERA, who anticipate that builders will come for registering at the nick of the time. COMPLAINT OR NOT.
Courtesy: https://www.nyoooz.com published on July 17, 2017
Foreign and local funds flow in for Indian Real Estate
MUMBAI: Indian real estate is witnessing a robust rise in investment inflow, due to the ongoing transformation in business environment, and as foreign and domestic institutional investors is infusing more funds into this sector.
According to the study carried by Knight Frank India, the Indian property market has showed a 40% on-year jump in inflow of funds since the beginning of this year. Institutional investors, such as private equity, pension funds, sovereign funds, domestic investors, and non-banking finance companies have pumped in $3.15 billion in the country’s real estate between January and June end, showed the study.
According to a separate study by JLL India, India has witnessed private equity inflow of Rs 16,008 crore until June this year compared with Rs 15,601 crore a year ago.
Over the past 18 months, the government has initiated a number of admirable policies including the implementation of the Real Estate Regulator Act (RERA), implementation of the Goods and Services Tax (GST), Real Estate Investment Trusts and the demonetisation drive. “The global economy has started recuperating with improving job prospects, decline in unemployment rates and rising rate of inflation in the developed economies.
Investors in these countries are expecting diminishing inflation adjusted returns. With the strengthening of domestic currency they are finding assets in emerging markets (EMs) cheaper from an investment perspective,” said Samantak Das, Chief Economist and National Director, Research, Knight Frank India.
By: Accommodation Times Bureau
Courtesy: http://accommodationtimes.com published on July 21, 2017
Indians among top investors in residential property in US
MUMBAI: The pall of gloom owing to protectionist policies has not kept Indians residing in the US from investing in real estate. By purchasing residential property worth $7.8 billion during the 12-month period ending March 2017, Indians emerged as the fifth largest investors in real estate in the US. Backed by mortgage finance, these properties were largely acquired for use as primary residence or for use by a child studying in the US.
Chinese nationals were the biggest buyers, purchasing residential property worth $31.7 billion in the same period. They were followed by the Canadians, British, Mexicans and, lastly, Indians.
Between April 2015 and March 2016, Indians had invested $6.1 billion and occupied third place on the list of biggest buyers. However, a surge of investments from other nationalities resulted in Indians slipping to fifth position in 2016-17.
The bulk of buyers from China, India, and Mexico were working and residing in the US, while most buyers from Canada and the UK were non-resident buyers, adds the report, "2017- Profile of international activity in US residential real estate" released recently by the National Association of Realtors (NAR).
More than a third of the Chinese buyers purchased residential property in California. Compared to the other major foreign buyers, Indians were not as concentrated in any state in the US and the location of their jobs largely determined their purchase. While California, New Jersey, Texas, Massachusetts, and Kentucky were top destinations, more than two in five Indian buyers purchased in another state.
In aggregate, foreign buyers purchased $153 billion of residential property in US between April 2016 and March 2017, which is a 49% jump from the figure of the corresponding previous period of $102.6 billion. In terms of number of units, foreign buyers purchased 2.84 lakh residential properties in US in April 2016-March 2017, up 32% from the previous period's figure of 2.14 lakh properties.
On an average, foreign buyers paid $536,852 for their properties, 12% more than the average price during the previous 12-month period. The average purchase price of properties bought by Indians was $522,440.
By: Lubna Kably
Courtesy: http://timesofindia.indiatimes.com published on July 21, 2017
Chandigarh, Delhi real estate regulatory bodies to be clubbed
The UT administration reasoned that it will be financially prudent for both the cities to share as Chandigarh has a low footprint of private developers which can come under the purview of the Real Estate Act
The city will now share its Real Estate Regulatory Authority and Real Estate Appellate Authority with Delhi, under the Real Estate (Regulatory and Development) Act, 2016. Members, when appointed, will be available in Chandigarh for a limited period every month, the exact duration is yet to be finalised.
The act states that every union territory (UT) and state must set up RERA (Real Estate Regulatory Authority) and REAT (Real Estate Appellate Authority) for safeguarding the rights of home buyers. Chandigarh was the first to set up a temporary RERA in October 2016. Later, the UT administration requested the ministry of home affairs (MHA) to club the Chandigarh RERA with Delhi’s.
Housing secretary KK Jindal said, “The administration wrote to the MHA in November 2016 to club Chandigarh RERA with that of Delhi’s. The ministry forwarded the letter to the Union ministry of urban development and poverty alleviation (MHUPA). The proposal was accepted in May after the MHUPA wrote to the lieutenant governor of Delhi.”
The process of the selection of the chairman was also initiated by the lieutenant governnor and is expected to be completed by the end of this month.
The UT administration reasoned that it will be financially prudent to club the Chandigarh and Delhi RERA. The city has a low footprint of private developers, which can come under the purview of the act. The public sector, Chandigarh Housing Board, is the main developer.
Every builder and real estate agent has to register their project with the RERA before they can advertise or market or sell projects to the buyer. Home buyers can make complaints with RERA against builders and agents. The appeals against the decisions of RERA can be made before the appellate tribunal. Violation of the act or non-compliance withe RERA and REAT orders can lead to a fine and imprisonment for the builder and the agent.
By: Munieshwer A Sagar
Courtesy: http://www.hindustantimes.com published on July 25, 2017
Centre asks states to set up realty regulators soon
Mumbai: The Ministry of Housing and Urban Affairs (MoHUA) has asked state governments to form a real estate regulatory authority immediately. At the same time, the Ministry has also requested to assign the task of Appellate Tribunal to any existing Tribunal where such a system has not been put in place.
As per the Real Estate Regulation Act (RERA), all existing and new projects must be registered with the regulator by July 31. The developers who fail to register under the new Act will attract a penalty of 10% of the project cost.
Meanwhile, two sets of builders have challenged the provision for mandatory registration of ongoing projects in two High Courts. The builders have pleaded that they should not be made to register their projects till the court passes a final order.
On July 11, the Nagpur Bench of Bombay HC had sent a notice to the Centre to respond. The government has stuck to the reason that RERA Act aims to protect consumer interests and foster the growth and development of the real estate sector.
Courtesy: http://www.nagpurtoday.in published on July 25, 2017
Plot owners move HC on RERA making them co-promoters
MUMBAI: Can a housing society or plot owner be held responsible for violations or irregularities committed by a developer under the new Real Estate (Regulation and Development) Act?
The owners of a three-acre plot on the Goregaon-Mulund Link Road, Mulund (W), have moved the Bombay high court challenging a circular issued by the state authority under RERA, which makes plot owners co-promoters in a real estate project.
The May 11 office order issued by the Maharashtra Real Estate Regulatory Authority has notified that any owner or organization which signs a development agreement with a builder will also have to register with RERA and will be treated as co-promoter of the project. It says this is because the owner will be entitled to a share of total revenue generated from the sale of flats or total area developed. It also states that liabilities of such a co-promoter will be at par with that of the promoter of the project.
The owners had entered into an agreement with Shiv Krupa Enterprises in December 2014 to develop the property. Thereafter, the owners and the developer entered into agreements in 2011 for sale of flats in three wings of Sristi Oasis Complex with flat purchasers. Being aggrieved that now even owners of land are required to register with RERA, the owners moved the HC saying the order is without jurisdiction as the Authority has sought to amend the word "promoter" as defined under Section 2 of RERA, which is impermissible. "The impugned order is thus a classic pick of the power of the Parliament which alone has jurisdiction and powers to amend the statute," their petition states.
It also states that the definition of promoter under RERA clearly shows that only a person acting himself as a builder, colonizer, contractor, developer, estate developer or by any other name or claiming to be acting as the holder of power of attorney from the owner of the land is a promoter."Thus, an owner of land, who is himself not developing the land, is obviously not included in the term of promoter," it adds.
The petition says the Authority by notifying the definition of "co-promoter" foists a liability on the owner which was never contemplated either under Maharashtra Ownership Flats Act or RERA and only "promoter" is defined under both acts. Even Parliament chose not to add the definition of co-promoter in RERA, it adds.
The petition has urged that the high court direct the Authority to withdraw or cancel the order, to hold that it had no jurisdiction to pass the order and quash and set aside the order and pending hearing and final disposal of the petition, to stay it. On Friday, before a bench headed by Justice Anoop Mohta, the petitioners' advocate Vishwajeet Kapse sought an urgent hearing. "The Authority has no jurisdiction to amend the Act," he said, informing that July 31 is the last date for registration under RERA. The judges then posted the hearing on July 31.
By: Rosy Sequeira
Courtesy: http://timesofindia.indiatimes.com published on July 30, 2017
71 Years of Independent India - The Real Estate Milestones
How a particular industry shapes up depends on government’s initiatives and interventions – largely done through new sector-specific policies as well as tweaking older ones to better suit the changing business environment.
Often, how a particular industry shapes up depends on government’s initiatives and interventions – largely done through new sector-specific policies as well as tweaking older ones to better suit the changing business environment. While the government’s role is important, it is the market conditions, geopolitical events, socio-economic changes in population and the element of time itself that are fundamental in evolution of industrial sectors, especially so, in the case of developing economies like India.
Given that real estate is a major industry across the world, there has been a constant focus in many countries to have more transparency in the sector through regulations and technology. India too has seen many policies in recent years but certain milestones are spread over decades. As the country will soon complete seven decades of independence, it’s worthwhile to remember the milestones that have had a long lasting impact on India’s real estate industry:
By: Ashutosh Limaye, JLL India | Mumbai
Courtesy:http://www.indiainfoline.com published on Aug 02, 2017
RBI repo rate cut set to provide major fillip to real estate
Real estate and banking experts anticipate the home loan interest rate to hover around 8 percent once the banks decide to pass on the benefit to consumers.
In the backdrop of major regulatory reforms such as RERA and GST being implemented, Reserve Bank of India’s decision to cut repo rate by 25 basis points after a gap of almost nine months is likely to put the residential real estate market back on the growth trajectory and give a boost to affordable housing.
Real estate and banking experts anticipate the home loan interest rate to hover around 8 percent once the banks decide to pass on the benefit to consumers. The RBI rate cut announcement does not mean an immediate reduction in home buyers' equated monthly installments (EMI) as banks may take time to pass on the benefit to consumers. It also does not mean that home buyers will make a beeline to purchase homes from day one of the announcement.
The RBI Governor-headed Monetary Policy Committee (MPC) noted that there was an urgent need to reinvigorate private investments, clear infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana (PMAY).
“There is an urgent need to reinvigorate private investment, remove infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana for housing needs of all. This hinges on speedier clearance of projects by the states. On their part, the government and the Reserve Bank are working in close coordination to resolve large stressed corporate borrowers and recapitalise public sector banks within the fiscal deficit target. These efforts should help restart credit flows to the productive sectors as demand revives,” the third bi-monthly monetary policy statement for 2017-2018 noted.
The Monetary Policy Committee also highlighted how longer approval process under RERA is likely to delay launches and have an impact on growth of construction and ancillary activities.
“With the real estate sector coming under the regulatory umbrella, new project launches may involve extended gestations and, along with the anticipated consolidation in the sector, may restrain growth, with spillovers to construction and ancillary activities,” it noted.
Samantak Das - Chief Economist & National Director - Research, Knight Frank India: “With real estate prices remaining stagnant, interest rate showing a declining trend, tamed inflation, RERA in place, the confidence of home buyers will be back in the market. This is an opportune time as the festival season is just over a month away. The move to cut rates is bound to increase sales traction. There may not be a full-fledged revival of the real estate market but it certainly heralds an initiation of a growth trajectory in the residential space.”
Interest rate for home loans is likely to hover around 8 percent going forward once banks decide to pass on the benefit to the consumers. Homebuyers will also be able to avail of the PMAY scheme benefit over and above this rate cut, he said.
“The RBI's decision to cut the repo rate by 25 bps to 6 percent - a 7-year -low – is in line with industry expectations amidst low inflationary trends. We believe that this cut will result in making housing loans cheaper and help credit offtake in the housing sector. In the long run, this will provide further impetus to the segment and help in rejuvenating housing sales. Coupled with the other structural reforms introduced in the recent past, this announcement will further enhance activity levels in the real estate and construction sector,” Anshuman Magazine, Chairman, India and South East Asia, CBRE.
“The RBI has taken a positive step by offering 25 bps reduction in the repo rate which will act as a catalyst for investment revival, going hand in hand with favorable government measures like RERA and GST which will boost housing demand benefiting both developers and buyers. This will also impact the economy positively and give a much needed credit flow,” Vineet Relia, Managing Director, SARE Homes.
“We anticipate that the rate cut announced today by .25 BPS, coupled with commensurate benefits for borrowers, will impact home loan rate positively and enhance the consumer sentiment. With the market view calling for measures that encourage investment to boost growth numbers, and with the installation of a regulatory regime for the real estate sector, we expect this move to keep the stimulus on for potential homebuyers to invest, and to benefit current borrowers,” said Brotin Banerjee, MD & CEO Tata Housing Development Company Limited.
“A repo rate cut would have a positive impact on the overall economy and the realty sector since it leads to lower borrowing costs for home buyers. With low construction costs borne by developers post GST, a regulated market with the introduction of RERA, and a repo rate cut making the home loan market even cheaper, going ahead the real estate sector is ripe for a positive comeback,” says Samir Jasuja, CEO & Founder, Propequity.
“It is also relevant to note that there may not be another rate cut during the remainder of the year as the RBI will continue to look at inflation headwinds. This stance of the MPC will also be important for global investors as the current stable interest rate regime in India will allow for better investor returns in India for global investors. This should keep investors reasonably attracted towards India,” says Anuj Puri, Chairman – Anarock Property Consultants.
By: Vandana Ramnani
Courtesy:http://www.moneycontrol.com/ published on Aug 02, 2017
India can be UK's natural partner after Brexit, says Paul
India can be Britain's natural partner at a much bigger level after Brexit, NRI industrialist Lord Swraj Paul has said.
He said the UK's decision to leave the European Union gives an opportunity to Britain and India to work together and gain from each other.
"Britain is coming out of Europe and India can be its natural partner on a much bigger level so I invite you to look at Britain as your first choice," said Paul, Chairman of the Caparo Group of industries.
He was addressing the 17th National Conference of Confederation of Real Estate Developers' Association of India here last evening on the topic 'India on the Global Stage'.
"We have two countries; Britain who would love to see both trade and investment grow from India, and India who would like to see more investment from Britain into India. We must make use of this opportunity as it will be a win-win situation for all of you and for the two countries," he said.
He said that there is no restrictions for anyone who wants to build a decent and honourable business.
"The government, the local councils etc, will give you all the support," he added.
He said that since becoming the prime minister, Narendra Modi has set a new benchmark for India's relationship with countries all over the world and raised the level of India's global standing.
"On behalf of NRIs, I can safely say that the NRI community will certainly support his action plan to rid the country of poverty, illiteracy and malnutrition and play their part," he added.
Courtesy: http://www.dnaindia.com published on Aug 13, 2017
Adding much-needed regulations to the real estate sector
RERA aims to improve the state of the industry, which in turn could pave way for rise in confidence and investments
India introduced the Real Estate (Regulation and Development) Act, 2016 ('RERA') partly on May 1, 2016 and fully on May 1, 2017. It is necessary to know the implications of RERA, as it is applicable throughout India and its provisions are to be observed mandatorily by promoters, purchasers and real estate agents ('Agents').
Till now there was no pan-India central legislation applicable to the real estate industry. The definition of a 'Real Estate Project' under RERA includes not only apartments and buildings, but also plots of land.
The development of layouts and sale of plots in India is now governed by RERA, which aims to bring the unregulated housing sector under its ambit and usher in an era of transparency and accountability.
Several states in India are required to appoint a Real Estate Regulatory Authority, ('Authority'), which is empowered to exercise administrative, executive, regulatory and judicial functions at the state level. A real estate project must first be registered with such an authority by means of a detailed application, coupled with a declaration and an affidavit by the Promoter. Once registration is completed, all requisite information and particulars in regard to the project will be published on the web page of the Authority as well as on the website of the Promoter.
RERA necessitates for the first time, the stringent specification of declaring the date of completion of a project, which is not easily extendable on frivolous grounds. Similarly, RERA has now stipulated that 70 per cent of the amount received by the Promoter for a project classified as an 'Under Construction Project' will have to be deposited in an escrow account or a special designated account and can only be withdrawn in the case of pro rata construction of the Project, vis-à-vis the apartment sold, after obtaining certification from three professionals, i.e. an Architect, Engineer and Chartered Accountant.
Experience shows that in India, the major reason for delay in the execution of real estate projects is largely because promoters divert the sales proceeds of one project to another and overtrade in business.
This malady is curbed by RERA, which prescribes that 70 per cent of such sales proceeds be deposited in an escrow account and that the withdrawal of such amounts be controlled by a stringent regulatory mechanism.
Further, RERA has for the very first time come up with a, 'Self Sufficient Legislation Scheme', which controls and provides, from the inception of a real estate project to its completion, a Dispute Resolution Mechanism together with a comprehensive Adjudicating Mechanism, all in a single legislation.
RERA also provides for a time bound scheme of adjudicating disputes between the promoter and purchaser and prescribes a period of 60 days for dispute resolution in the first instance and a further 60 days for any appeal from the Order of the Authority.
There are various states like Maharashtra and Karnataka that have local laws, but these are not comprehensive and RERA provides an overarching central legislation, which is a complete code by itself.
It is pertinent to note that not only does a real estate project have to be registered but even real estate agents must be registered under RERA. Unregulated agents operating in the market were responsible for numerous malpractices but now, like America, Europe and the U.K., India also has a system in place for 'Registered Real Estate Agents' to conduct the business of marketing real estate projects.
These registered agents are subject to stringent provisions under RERA and this will bring about immense discipline and accountability on the part of these agents.
RERA has paved the way for systemic changes in the manner in which Indian promoters think and operate. It will change the way the Indian real estate industry acts and responds to the market and the consumers, in turn following, the several compliances prescribed under the law.
Without a shadow of a doubt, RERA will bring in a great deal of professionalism in the real estate industry, and also lead to standardisation of the product and the process of functioning of the industry at large. In its truest sense, RERA has brought the real estate industry under its regulatory regime.
By: Parimal K. Shroff
(Parimal K. Shroff is an advocate and solicitor) Courtesy: http://www.khaleejtimes.com published on Aug 14, 2017
Indians second largest buyers of Central London property
South-east Asians accounted for 36% of property sales in Central London in the year to August, followed by Indians at 22% and West Asia 21%, as per London Central Portfolio’s latest sales audit.
Bengaluru: Indians are the second largest buyers of property in central London, accounting for 22% of sales in the year to August, pushing buyers from West Asia to the third slot (at 21%), according to property investment advisory London Central Portfolio’s (LCP) latest sales audit.
South-East Asian buyers took the top spot, accounting for 36% of all purchases.
Interestingly, Indians also spent more per house. They accounted for one-third of the total spend, with an average purchase price of £1.77 million, slightly higher than the market average of £1.6 million.
Meanwhile, the number of buyers from continental Europe has fallen significantly, and they now account for only 7% of sales, from 24% previously.
Analysts attribute this to the uncertainty following Brexit.
Following 2015’s changes to the Liberalised Remittance Scheme in India that increased the amount Indians could spend on properties in the UK (or elsewhere) to $250,000 per person, there has been a notable surge of purchases from wealthy Indian families.
Their interest has been stoked by a sluggish real-estate market back home, LCP’s chief executive Naomi Heaton said in a 14 August release.
“As India has become a more challenging place to invest in, with high loan interest rates and rising prices in the main urban centres, together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London as an investment destination of choice.”
“As sterling has weakened against foreign currencies, representing a 20% discount for dollar denominated investors compared with two years ago, we are now seeing Indian buyers becoming an increasingly dominant force in the marketplace. They have overtaken buyers from the Middle-East, who have fallen to third place,” Heaton said. In the year to 15 August, the pound has fallen 1.38% against the rupee.
Indian developers beat Indian buyers to London by a few years.
In 2014, Mumbai-based Lodha Developers Pvt. Ltd acquired the MacDonald House property from the Canadian embassy in Mayfair for over £300 million.
Lodha also bought another property in Lincoln Square, and started selling apartments in the project last year. In May, Lodha UK, the London-based development arm of Lodha Developers, also raised $375 million (£290 million) of construction finance from Cain Hoy for the Lincoln Square project. It has sold 78 units worth almost $170 million (£130 million) between May 2016 to May 2017.
Another Mumbai-based developer Indiabulls Real Estate Ltd soft-launched its project Hanover Bond—a collection of 79 apartments and a five-star hotel—in March, and opened bookings for customers. The developer bought the property in London’s Mayfair in 2014 for around Rs1,550 crore.
In an investor presentation in July, Indiabulls said it has sold four apartments during the soft launch at £4,750 per square foot, at a total value of £15.48 million.
The project is scheduled to be officially launched in the third quarter of 2017.
Lodha’s No.1 Grosvenor Square project in the heart of Mayfair, and just around the corner from Bond Street and Mount Street, comprises 39 apartments and five bespoke duplexes. The apartments start at £7.5 million or Rs63 crore.
“Since its opening of private preview earlier this year, the project has been sold at exceptionally high rates of £6,000 per sq.ft,” a Lodha spokesperson said.
By: Madhurima Nandy
Courtesy: http://www.livemint.com published on Aug 17, 2017
Realty firms up with Rs 12,700 crore inflows in first of this year
Residential market got $1,075 mn, commercial $796 mn, retail $119 mn
India's real estate market has seen an investment of $1,990 million (approximately Rs 12,766 crore) in the first half of this year, and the residential segment has cornered 54% of it. The inflows have been robust thanks to greater transparency ushered in by various reforms.
Terming the investments as a massive boost to the sector, Anuj Puri, chairman of Anarock Property Consultants which has come out with the report on inflows in real estate, said, “Residential property remained the most preferred asset class in Indian real estate during H1 2017.
While overall investments in Indian realty touched $1,990 million in this period, the residential sector accounted 54% ($1075 million) of total investments. In the same period, investments into commercial realty accounted for 40% ($796 million) and retail received 6% ($119 million) of total real estate investments.”
Similar views were shared by Shobhit Agarwal, managing director - capital markets and international director, JLL India.
“As far as investment inflows into Indian real estate are concerned, 2017 seems to have set a new milestone. The total investments are the highest ever seen in any year’s first half. It has not only exceeded the H1 2007 but also H1 2016. Given the scale, 2017 seems set to break all previous investment records,” Agarwal said.
Explaining the factors behind the surge in investments, Puri said that the institutional investors have for long been waiting for greater transparency in the Indian real estate market, which has now arrived with the deployment of Real Estate (Regulation and Development) Act (Rera) and goods and services tax (GST).
Besides, liberalisation of foreign direct investment has also improved the investment community’s sentiment. This measure is expected to attract further private equity from foreign players, opined Agarwal.
Thirdly, non-credible players are in a dock with the consumer-friendly Rera law. As a result, they either have to withdraw from the market or get into a joint venture or joint development or outright sale of the project with strong and well-known players.
According to Puri, all indicators point towards a decisive return of buyer interest over the next 18-24 months. This revival is likely due to a combination of factors such as improved buyer confidence with Rera implementation, new taxation norms and repo rate cut being to 6% by Reserve Bank of India.
Hence, there is a possibility of top-notch developers becoming the preferred lot with the buyers during the upcoming festive season. In order to be Rera compliant, real estate firms had kept new project launches on hold, which will happen just before the festive atmosphere kicks in.
By: Ateeq Shaikh
Courtesy: http://www.dnaindia.com/ published on Aug 17, 2017
Shapoorji Pallonji Real Estate to launch six projects in FY18
Shapoorji Pallonji Real Estate CEO Venkatesh Gopalakrishnan says 2-3 projects will be developed in Mumbai, two in Pune and one in Delhi-NCR
Mumbai: Diversified Shapoorji Pallonji group’s real estate arm is lining up at least six projects across the country in 2017-18, with two in the affordable housing segment, a senior company official said.
“We plan to launch at least six projects this financial year. Out of these, we would be developing two projects under our ‘Joyville’ brand to build affordable homes,” Shapoorji Pallonji Real Estate chief executive Venkatesh Gopalakrishnan told PTI in Mumbai.
Of the six, 2-3 projects are being planned to come up in the megapolis, two in Pune and one in the National Capital Region (NCR), he said, adding that the company already has 40 million sq ft land bank across the country.
“We will be officially launching our affordable housing project in Virar by September-October. The second project under the Joyville brand at Hinjewadi in Pune will be launched by March 2018,” Gopalakrishnan said.
The SP Group entered the affordable housing segment last year by joining hands with Standard Chartered Private Equity, International Finance Corp. (IFC), an arm of the World Bank, and the Asian Development Bank (ADB).
Under the agreement, the partnership will invest about $250 million, which will be used primarily for buying land and setting up initial infrastructure. The company launched its first project under the brand Joyville at Howrah near Kolkata.
Asked whether the company is looking to raise funds for these projects, he said, “We already have the land, so the funds would be raised on project to project basis. This would be mainly through debt.”
About the impact of the new Real Estate Regulatory Act (RERA) and the goods and services tax (GST), he said there will be certain teething issues in the beginning, but then developers will have to adapt to the change.
“As per the RERA, we have registered five ongoing projects, with four in Maharashtra and one in Bengaluru where the rules are out. We have projects in West Bengal and the north, but the rules there are not yet out,” Gopalakrishnan added.
Courtesy: http://www.livemint.com published on Aug 20, 2017
Ram Rahim Rape Case LIVE: Dera Chief Sentenced To 20 Years In Prison
The sentence against rape convict Gurmeet Ram Rahim Singh was declared by a special CBI court yesterday. He has been sentenced to 20 years in prison as he was announced guilty of raping two women in a 2002 case.
Followers of Dera Sacha Sauda in Punjab, Haryana and other cities, burned down gas stations and train stations and torched vehicles after Dera chief Ram Rahim was announced guilty of rape by the special CBI court in Panchkula on Friday.
At least 38 people were killed and more than 200 injured in the violence in Haryana, officials said, drawing sharp criticism for the state government. The Haryana police said they have made sufficient security arrangements to ensure peace and harmony.
The 50-year-old "Guru of Bling" has been lodged in Rohtak's Sunaria jail. Rohtak has been placed under multi-layered security; 28 companies of paramilitary troops have been stationed in the town and Dera followers are not being allowed to enter the district.
Courtesy: http://www.ndtv.com published on Aug 28, 2017
Doklam settlement in line with interests of both: China
Chinese Ministry of Foreign Affairs said China would continue to patrol the Doklam region.
Setting aside their differences exactly a week before the BRICS summit, China and India Monday signalled the end of the border row in Doklam. China said it had confirmed that India had withdrawn personnel and equipment from Doklam and that the Chinese side would make “necessary adjustments” to the deployment of its own forces along the border.
China’s Ministry of Foreign Affairs said Beijing would continue to patrol the region. “Chinese personnel conducted an on-site check at the disputed area at 2.30 pm (Beijing time). China will continue to safeguard its territorial sovereignty according to historical boundary treaties,” MFA spokesperson Hua Chunyin said.
The MFA also indicated that China’s deployment in the disputed area would be “adjusted”. “China’s border guards will continue to patrol the area. At the same time and in view of changed situation, the Chinese side will make the necessary adjustments and deployments,” Hua said. She added that the settlement of the issue through diplomatic means were “in line with the interests of both countries”.
She emphasised the importance of diplomacy in ending the dispute, which began mid-June. “The Chinese government attaches great importance to developing good and friendly relations with India. We hope that India will earnestly abide by historical and basic principles of international law and work with China to safeguard peace and tranquillity along the border and promote the healthy development of bilateral relations on the basis of mutual respect for territorial sovereignty,” said.
Foreign policy experts in China welcomed the thaw in relations with India considering the BRICS summit in Xiamen in China, which starts next Monday. “All BRICS countries should celebrate the easing of tensions between India and China. This is a very good signal that the two countries have more in common than disputes,” said Wang Yiwei, professor at the School of International Studies, Renmin University.
Wang Dehua, Director, Institute for South and Central Asia Studies in Shanghai, said the decision to end the dispute was a symbol of BRICS unity. “This 2017 BRICS summit is very important. It is the tenth edition of the summit and discussions will centre on planning the future and leaders are expected to take major decisions on projects over the next decade,” he said.
According to Wang Dehua, leaders of both countries would now have to demonstrate the importance of bilateral ties between India and China. “With this conflict out of the way, leaders of both countries can use the BRICS platform well. They must focus on the importance of Chindia and the cooperation between two important civilisations,” he said.
“India and China have no reason to quarrel and if it ever comes to war, it will be a lose-lose situation. Only negotiation will work. Peace is very valuable. I remember a scholar once telling me that if the dragon and elephant fight, they will trample the grass,” Wang Dehua said. By grass he was referring to other countries in South Asia.
Courtesy: http://indianexpress.com published on Aug 29, 2017
Why Gurmeet Ram Rahim’s Dera became a Dalit citadel
While political parties such as the BSP and the Left looked at the marginalised only as vote banks, the landless and the poor found social equity and dignity in the Dera.
What do you get if you throw together a good measure of unflinching faith, a sense of belonging, some empowering identity and a dash of aspirational headiness? The answer is almost always the same: Millions of ardent followers.
Despite the 20-year jail term recently handed to its head, Gurmeet Ram Rahim Singh, the Sirsa-based Dera Sacha Sauda continues to boast of a huge following across the social spectrum. Political experts say the sect commands a strong presence among Dalits and economically backward sections of the society. While Haryana, Punjab and Rajasthan remain its nerve centres, the sect is gradually making inroads into other states like Madhya Pradesh, Chhattisgarh, Odisha, Maharashtra, Gujarat, Karnataka and Kerala.
The sway held by the Dera over its followers manifests itself in poll diktats and its ability to swing electoral fortunes across various states. Mindful of this fact, politicians of all hues make a beeline for the sect headquarters in Sirsa whenever it’s election time.
The Dera advantage
So, what makes people – especially those from marginalised sections – turn to Deras?
Professor Ashutosh Kumar, a political scientist from Panjab University, believes disappointment over religious matters plays a significant part in this phenomenon. “These sects offer dignity to their disciples by seeking to eradicate caste inequality. Acts like providing food, ration and money to the poor also help them win the allegiance of the disadvantaged,” he adds.
Practices like christening the head of its meditation centre as bhangidass (somebody from the lower caste) and making all the followers forsake their original surnames to adopt the title of Insaan (human being) created a feeling of parity among followers of the Sacha Sauda.
The Dera’s strong stand against liquor and drug abuse, a major social problem that often leads to domestic violence and disintegration of families across the country, has gained it many women followers. Besides this, provision of financial aid during weddings as well as subsidised ration and free access to the sect’s medical facilities during times of illness has helped its numbers swell over the years.
The “mystical” aspect of the Dera Sacha Sauda head also helped him draw followers. “The Dera used technology and literature to project its gurus as superhumans endowed with divine powers,” says Professor Kumar.
The story regarding Ram Rahim’s induction into the sect, and his gradual ascendancy from follower to leader, has been well-documented. The documented text calls Ram Rahim a child prodigy who excelled in everything he did, and learnt how to drive at the age of eight. His followers, better known as premis, vouch for the Dera chief’s healing touch and mystical powers.
Solace in times of ill-health
Professor Rajiv Lochan, professor of contemporary Indian history at Panjab University, says people find solace at Deras. “When it comes to health issues, people will seek aid wherever they can find it. Call it the placebo effect, but you will find a large number of followers claiming to have experienced a sense of wellness after obtaining the blessings of their gurujis,” he adds.
What’s more, joining Deras fills them with a sense of optimism. “They find a sense of belonging there. Being part of a bigger organisation, or brotherhood, helps one feel superior,” he says.
Deras free their followers from religious customs and rituals, often a financially demanding task for the poor, giving them greater flexibility to practice their faith. Professor Ronki Ram of Panjab University’s political science department says the Dera provides people with an alternative space for social, spiritual and cultural fulfilment. “It welcomes people, irrespective of their religion or caste. People are not expected to perform rituals, and they are not looked down upon because of their caste or economic status,” he adds.
The fact that the Dera head usually appears before the distressed in flesh and blood, assuring them of relief in some form, plays a significant part in hiking the sect’s popularity. Professor Ram believes Deras can be understood as an alternative to mainstream religion, where faith creates social capital.
The Dera Sacha Sauda took the plunge into electoral politics by supporting the Congress in the 2007 Punjab assembly elections. Neither Panthic groups nor the Akalis were pleased with the fact that a large number of Dalit Sikhs were being weaned away by the sect.
The group later floated a political affairs wing, which made a dent in the traditional Akali vote in Punjab’s Malwa region. The Dera endorsed the Congress in the 2009 Haryana assembly elections, but later switched sides to support the BJP in its 2014 edition.
The impact on BSP, Left
The rise of the Deras and their ability to attract marginalised sections of the society – mostly the landless, the Dalits and the underprivileged in Punjab (especially Malwa) – resulted in political forces such as the Bahujan Samaj Party and the Left steadily losing out on potential voters.
CPI national executive member Joginder Dyal admits that the Left suffered losses ever since the Dera became a refuge for the landless and Dalits. “Poverty was the main reason why many move towards the sect. While religion wouldn’t provide them with equal rights, political parties never looked at them as anything beyond vote banks,” he says.
So, Gurmeet Ram Rahim Singh’s conviction in the 2002 rape case has become a matter of immense political interest across the country. Because, if his Dera were to lose out on its followers as a consequence, there are many who would like to swoop in and claim them as their own.
By: Hitender Rao
Courtesy: http://www.hindustantimes.com published on Sept 01, 2017
ISRO’s private sector-built IRNSS 1H satellite launch fails, agency to analyse
The launch of India’s latest navigation satellite onboard its polar rocket failed on Thursday following a technical glitch just prior to its scheduled orbiting in space.
The launch of India’s latest navigational satellite IRNSS 1H in its indigenous GPS system NavIC (Navigation with Indian Constellation) failed due to a technical glitch on Thursday.
A rare setback for the Indian Space Research Organisation (ISRO) mission, the satellite’s fourth stage in the launch mission did not go as planned, nearly 20 minutes after satellite had a perfect lift off from the space centre in Sriharikota. (HIGHLIGHTS)
ISRO chief AS Kiran Kumar said the mission, the eighth navigational satellite to be launched, was unsuccessful and said further analysis would be carried out.
“The C39 launch vehicle had a problem, heat shield has not separated. As a result of that the satellite is inside the heat shield and we have to go through the detailed analysis to see what has happened,” he announced at the Mission Control Centre.
The first three stages of the satellite launch were completed as intended. However,in the fourth state, the satellite did not deploy as something went wrong with its heat shield after the command for separation was initiated.
Adressing media after the failed launch, Kumar said it was fortunate that the PSLV-C39 had only one satellite on board.
A successful launch would have ushered a new era in the country’s history of space exploration as, for the first time, the private sector has been actively involved in assembling and testing of a satellite. Earlier, the private sector’s role was limited only to supplying components.
The 1,425 kg satellite took off from Satish Dhawan Space Centre at 7 pm on Thursday. The IRNSS 1H was to augment the existing seven satellites in the NavIC system.
The seven satellites in the constellation were launched between 2013 and 2016, and the IRNSS 1H was necessitated because of “anomalies” in all three atomic clocks on-board IRNSS 1A, the first satellite in the system.
Atomic clocks are used to provide time-stamped data. The on-board rubidium-based atomic clocks have a high degree of precision and do not lose or gain even a single second over millions of years.
However, the IRNSS 1H will not replace the IRNSS 1A satellite, which will now be used for providing messaging services.
The IRNSS 1H had navigation and ranging payloads on board and was set for a mission life of 10 years. Just like the other seven satellites in the NavIC, this satellite too was to orbit nearly 36,000 kms above the earth.
The indigenous GPS – NavIC – will provide reliable time-stamped navigational information to users and will have position accuracy better than 20 metres over India and surrounding regions extending to about 1,500 kms.
NavIC will reduce India’s dependency on foreign satellites for GPS data.
The system will be useful for any kind of navigation apps, taxi aggregator apps, location based operations like finding a hospital or shop, or even for the fishermen who will be able to access information on high-yield areas and the kind of weather to expect. It will help in disaster relief operations, among others.
With this navigational system, India will become a part of the elite group of countries that have their own navigational systems including the USA, Russia, China and Europe.
With inputs from PTI
By: Anonna Dutt
Courtesy: http://www.hindustantimes.com published on Sept 01, 2017
Modi, Abe to kick-start India's first bullet train project
Indian Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe will break ground on India's first bullet train project on Thursday in western Gujarat state, as the country seeks faster travel for millions.
Modi has pledged to invest billions of dollars to modernise India's creaking railway system, with the bullet train one of his key election promises ahead of his landslide victory in 2014.
The leaders will lay the foundation stone of the high-speed rail network between Ahmedabad -- the capital city of Modi's home state -- and India's financial hub of Mumbai on September 14, a statement by the Gujarat government said Saturday.
Japan is a pioneer in high-speed rail networks, and its Shinkansen bullet train is among the fastest in the world.
Japan will provide 85 percent of the total project cost of $19 billion in soft loans.
The train will reduce the travel time between the two cities from eight to three-3.5 hours, and is expected to complete by December 2023. It will have a capacity of 750 passengers.
India's traditional railway network is the world's fourth largest by distance and remains the vast country's main form of travel, with 22 million passengers commuting daily.
But passengers have to often endure chronic delays in journeys on the British-era network, where only a few trains hit 100 miles per hour, and which has been hit by series of deadly crashes in past years.
Modi recently replaced his railway minister after a series of derailments, including one last month which killed at least 23 passengers in the northern Uttar Pradesh state.
In November, 146 people died in a similar disaster in Uttar Pradesh.
Abe's two-day visit to Ahmedabad comes ahead of Modi's 67th birthday on Sunday. Modi has a history of 'birthday diplomacy' in his home state, hosting Chinese President Xi Jinping in Gujarat on his birthday in 2014.
The two leaders are expected to sign several agreements during the visit and inaugurate a Japanese industrial park in the state that already hosts Honda and Suzuki auto plants.
By: Hitender Rao
Courtesy: https://uk.news.yahoo.com published on Sept 10, 2017
Doklam standoff: How did India, China resolve the crisis?
Two weeks on, no official word from India and China on how the Doklam standoff was resolved
New Delhi: It has been two weeks since India and China agreed to disengage after a 73-day military standoff on the Doklam plateau in Bhutan. But so far, there has been no official word from New Delhi or Beijing on how the two struck a deal to pull back from their most serious face-off in two decades—creating space for theories to mushroom.
One of these is that Chinese President Xi Jinping sacked a senior general in the People Liberation Army’s (PLA), who was thought to have been standing in the way of a resolution of the Doklam standoff—and that this led to the deal being struck.
According to Brahma Chellaney, professor of strategic studies at the New Delhi-based Centre for Policy Studies think tank, “the mutual withdrawal deal” by India and China that was announced on 28 August “was clinched just after Chinese President Xi Jinping replaced the chief of the People Liberation Army’s (PLA) joint staff department.”
This position, considered the most senior in the PLA and equivalent to the chairman of the US joint chiefs of staff, was created last year as part of Xi’s military reforms to turn the Chinese Army into a force “able to fight and win wars,” Chellaney said in an article in the Hindustan Times last week.
“The Doklam pullbacks suggest that the removed chief, General Fang Fenghui, was an obstacle to clinching a deal with India and probably was responsible for precipitating the standoff in the first place,” he said.
In his piece, Chellaney recalled that Chinese President Xi’s visit to India in 2014 happened in the midst of a Chinese military incursion in Ladakh—just as a visit by Chinese premier Li Keqiang to India in 2013 was overshadowed by another incursion, also in Ladakh.
Chellaney further pointed to Xi’s repeated demand of “absolute loyalty” from the Chinese military—most recently at the PLA’s 90th anniversary in July. “Had civil control of the PLA been working well, would Xi repeatedly be demanding ‘absolute loyalty’ from the military or asking it to ‘follow his instructions?’” he wrote.
Other analysts however seem unconvinced by this argument.
“I think the situation in China is more complex than this which, to my mind, is a simplistic reading of the situation,” said former foreign secretary Kanwal Sibal. Sibal’s own view is that “Xi was trying to consolidate his position with the 19th Congress of the Chinese Communist Party due next month”.
“He in the recent past has purged a number of high ranking officers from the military on charges of corruption. So no doubt he is trying to consolidate his position but this cannot be seen in the light of the Doklam standoff,” Sibal said, adding: “It does not fit in with Chinese politics.”
According to Happymon Jacob, professor of international relations at the Jawaharlal Nehru University in New Delhi, “In a tightly controlled regime like China, it is not easy to imagine that the country’s military would work at cross purposes with its civilian leadership.”
“I do not think there is enough evidence yet to suggest that PLA is not under the control of China’s political leadership,” he said.
“With regard to the PLA’s rhetoric against India, there are parallels elsewhere as well. India’s military leadership often speaks out against China and Pakistan which does not mean that the civilian government in India has lost its control over the military,” he said.
By: Elizabeth Roche
Courtesy: http://www.livemint.com published on Sept 11, 2017
India drop 10 places in FIFA rankings, out of top 100 for first time in four months
India's drop in the rankings come despite them winning the friendly tri-nation series at home against Mauritius and Saint Kitts and Nevis. This was followed by a 2-0 win over Macau away from home in the AFC Asian Cup qualifiers
India have slipped out of the top 100 in FIFA rankings. In the latest rankings, India are ranked 107th, as opposed to 97 that they were before this. India have most recently played against teams that are far below them in the rankings as opposed to other nearest teams. This ends a nearly unprecedented four-month stay in the FIFA top 100.
India defeated Macau 2-0 away from home in the AFC Asian Cup qualifier before which they won a friendly Tri-Nation series against Mauritius and Saint Kitts and Nevis. Their drop in the rankings may only be a momentary occurrence considering the volatile nature of the rankings when it comes to the lower rungs. India now have 315 points, as opposed to 341 they had earlier.
Germany have taken the top spot in the FIFA rankings once again after the conclusion of the latest leg of the World Cup qualifiers. With 1606 points, Germany have leapfrogged Brazil to go top of the world rankings. Germany have won all eight of their qualifiers for Russia 2018.
Portugal, meanwhile, have replaced Argentina in third place with 1386 points. Portugals’ qualifying campaign was brought back on track in their most recent matches. European teams, in general, have gained on their South American at the top of the rankings largely due to the former playing two matches as opposed to the one played by the likes of Brazil, Argentina, Uruguay and so on.
By: Express Web Desk Courtesy: http://indianexpress.com/ published on Sept 14, 2017
Narendra Modi, Shinzo Abe discussed Doklam: China in mind, India and Japan agree to deepen strategic
The reference to Pakistan-based terror groups is a new addition to the joint statement which said that the two leaders looked forward to “strengthening cooperation against terrorist threats from groups including Al-Qaida, ISIS, Jaish-e-Mohammad, Lashkar-e-Tayyiba, and their affiliates”.
Over dinner, Wednesday at Agashiye, one of Ahmedabad’s top restaurants, Japanese Prime Minister Shinzo Abe raised the issue of the recent Doklam standoff between Indian and Chinese troops. He recalled his own experience with China over claims to the Senkaku/Diaoyu islands, between 2012 and 2014, which had rocked bilateral ties between Tokyo and Beijing. That spat ended with a four-point term of reconciliation, and a handshake with Chinese President Xi Jinping towards the end of 2014.
Describing his dealings with the Chinese as “very challenging”, Abe complimented Prime Minister Narendra Modi for standing his ground on the Doklam standoff. And, then the two leaders spoke of their commitment to peace and stability in the Indo-Pacific region. This, sources said, set the tone for the bilateral meeting Thursday.
And the joint statement later reflected the congruence of views, sending a strong signal on strategic convergence - India and Japan articulated their concerns on Pakistan-based terror groups, North Korea’s nuclear programme and China’s One Belt One Road project. They dropped any direct mention of South China Sea in the joint statement but underlined the importance of a “free, open and prosperous Indo-Pacific region”.
Officials said the Rohingya refugees crisis was a “passing mention” at the talks. The two sides agreed to cooperate on defence technology, including dual-use technology, and said they were in “serious discussions” on the US-2 amphibious aircraft, although there was no breakthrough on that front. They said they were cooperating on “surveillance” and “unmanned system technologies” in the defence sector - a clear reference to high-technology equipment for military purposes.
The two leaders, who held talks at the Mahatma Mandir convention centre in Gandhinagar and attended the business plenary session, also participated in the ground-breaking ceremony for a high-speed bullet train.
After the talks, Modi said, “Mutual trust and faith, understanding of each other’s interests and concerns, and continuous high level interactions, this is the uniqueness of Indo-Japan relations. The scope of our special strategic and global partnership is not confined to bilateral or regional levels only. We also have close cooperation on global issues.”
Abe said that as the situation in international scenario gets “more opaque”, the two countries are determined to make strides together. “We have just signed a joint statement which will serve as a milestone to open a new era for Japan-India relationship. Based on that, we will strongly promote Japan-India special strategic and global partnership to drive peace and prosperity for Indo-Pacific region and the whole world,” he said.
The reference to Pakistan-based terror groups is a new addition to the joint statement which said that the two leaders looked forward to “strengthening cooperation against terrorist threats from groups including Al-Qaida, ISIS, Jaish-e-Mohammad, Lashkar-e-Tayyiba, and their affiliates”.
This comes less than a fortnight after the BRICS declaration in Xiamen named LeT and JeM.
Foreign Secretary S Jaishankar said that when such statements are made, be it BRICS or with Japan, “they have value” as they “create a narrative”, and they have an “impact”.
Without naming China, the two leaders also took a strong position on the “One Belt One Road project”, underlining the importance of all countries ensuring the development and use of connectivity infrastructure in “an open, transparent and non-exclusive manner based on international standards and responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and the environment”.
While India had openly criticised the Belt and Road Initiative and boycotted the meeting on the initiative in Beijing in May this year, Japan had sent a delegation to the meeting. The joint statement, however, reflected Japan’s “concerns” on Chinese President Xi Jinping’s flagship project, almost identical to India’s statement on OBOR.
“They also reaffirmed the importance of ‘quality infrastructure’ which, among others, ensures alignment with local economic and development strategies, safety, resilience, social and environmental impacts, and job creation as well as capacity-building for the local communities,” the joint statement said.
The North Korean situation was reflected amply and elaborately in the statement, in view of Japan’s concerns. India too made common cause on the issue, and pointed to links between the Pakistan and Chinese nuclear programmes and the North Korean programme.
From the Indian perspective, the line that mattered most in the paragraph condemning North Korea’s continued development of nuclear weapons and ballistic missiles was this: “They stressed the importance of holding accountable all parties that have supported North Korea’s nuclear and missile programmes.”
The reference to “holding accountable all parties” was directed at China and Pakistan — India, in the past, had flagged its concerns. Pakistan’s top nuclear scientist A Q Khan shared high-technology and equipment with the North Korean regime which was also likely supported by Chinese technology and expertise.
On the North Korea issue, Abe said that “Modi and I are in full agreement”. But they dropped any direct reference to South China Sea, a rather sensitive issue for Beijing. Unlike the 2016 joint statement which had mentioned South China Sea specifically, the two sides only “reaffirmed the importance of freedom of navigation, overflight and unimpeded lawful commerce in accordance with international laws”, including UNCLOS (United Nations Convention on the Law of the Sea).
“The two Prime Ministers also reiterated their desire and determination to work together to maintain and promote peace, stability, and development in the Indo-Pacific region,” the joint statement said.
Asked about the omission of South China Sea, Jaishankar pointed to the paragraphs on Indo-Pacific and the principles of freedom of navigation. “When you have mentioned the full set, subsets are covered” - meaning SCS is part of Indo-Pacific.
On defence, they agreed to enhance defence and security cooperation and dialogues, including MALABAR and other joint exercises, defence equipment and technology cooperation in such areas as “surveillance and unmanned system technologies”, and defence industry cooperation. They also flagged cooperation between the two navies on “anti-submarine aspects”.
The joint statement said that the two Prime Ministers noted recent progress in bilateral cooperation on defence equipment and technology, including the commencement of the “technical discussion for the future research collaboration in the area of Unmanned Ground Vehicles and Robotics”.
On the US-2, the statement said, “Japan’s readiness to provide its state-of-the-art US-2 amphibian aircraft was appreciated as symbolising the high degree of trust between the two countries. The two governments decided to continue their discussions in this regard,” it said — Jaishankar said there were “serious discussions”.
“They recognised the importance of enhancing interactions between governments and defence industries of the two countries in order to encourage equipment collaboration including defence and dual-use technologies,” it said.
On the civilian nuclear cooperation, the two sides also formed a working group to strengthen their cooperation — months after the pact has come into force.
By: Shubhajit Roy
Courtesy: http://indianexpress.com/ published on Sept 15, 2017
18 hurt in London terror attack, most sustaining 'flash burns'
British police have declared a terrorist incident after a blast sent a "fireball" and a "wall of flame" through a packed London Underground train.
Assistant Commissioner Mark Rowley said the explosion was caused by the detonation of an improvised explosive device.
Mr Rowley said it is understood that "most" of the 18 people injured in the blast were suffering from "flash burns".
Officers from the Metropolitan Police's counter-terrorism command have launched an investigation following the explosion in west London during rush hour.
The force said police were called at approximately 8.20am to Parsons Green Underground Station "following reports of a fire on the train".
The Met said Deputy Assistant Commissioner Neil Basu, the national coordinator for counter-terrorism policing, "has declared it a terrorist incident", adding: "At present we are aware of a number of people who have suffered injuries."
British Prime Minister Theresa May is to chair a meeting of the government's Cobra emergencies committee this afternoon to discuss the incident.
The PM said: "My thoughts are with those injured at Parsons Green and the emergency services who, once again, are responding swiftly and bravely to a suspected terrorist incident."
Commuters fled in terror after the blast and witnesses reported seeing several people hurt and "covered in blood" after a "flash and a bang" on the District Line Tube.
Emergency services including armed police rushed to the scene and cordoned off the station.
Pictures posted on social media appeared to show wires protruding from a flaming bucket inside a plastic carrier bag on the floor of a carriage.
The Met said: "It is too early to confirm the cause of the fire, which will be subject to the investigation that is now under way by the Met's Counter Terrorism Command."
Media technology consultant Richard Aylmer-Hall, 53, was sitting on the District Line train bound for central London when panic unfolded at around 8.20am.
He said he saw several people injured, having apparently been trampled as they tried to escape.
He told the Press Association: "I was blissfully reading my paper and listening to a podcast and suddenly the whole world charged past me down the platform, down the Tube."
Sylvain Pennec, a software developer from Southfields, near Wimbledon, was around 10m from the source of the explosion when fire filled the carriage.
"I heard a boom and when I looked there were flames all around," he said.
A major incident has been declared at St Mary's Hospital in Paddington in response to the Parsons Green explosion.
The Metropolitan Police urged anyone with photographs from the scene to upload them to www.ukpoliceimageappeal.co.uk to aid the investigation.
Courtesy: https://www.rte.ie/ published on Sept 15, 2017