The average cost of construction is estimated to have increased by up to 11% over the past year. While average cement prices have declined by 15%, and steel prices have seen a marginal 1% decrease over the last 12 months, the overall rise in construction expenses has persisted. The combined impact of price changes in four major construction materials—cement, steel, copper, and aluminum—has remained relatively modest.

According to industry estimates, labour costs have been the key driver of rising construction expenses. With labour accounting for more than one-fourth of total construction costs, a 25% annual increase in labour wages has placed pressure on construction budgets and operational spending. The growing need for skilled workers, along with expenses related to training, safety, and regulatory compliance, has further contributed to escalating labour costs.

As of October 2024, construction costs in the residential segment recorded an estimated 11% year-on-year increase. Among all real estate categories, cost escalation has been most significant in the residential sector.

A rising emphasis on higher building quality and the increasing demand for well-equipped gated communities have encouraged developers to upgrade their projects, leading to higher construction expenses in the housing segment.

To address challenges arising from fluctuations in skilled labour availability, developers are increasingly investing in training programs and automation, which can aid in improving project planning and scheduling.

The capital markets regulator has directed an entertainment company to pay ?26 crore in fines for failing to clear penalties previously imposed in a case related to illegal diversion of funds. The regulator also warned that the firm's assets, including bank accounts, would be attached if payment is not made within 15 days of the notice issued on Thursday.

The notice was issued after the entity failed to pay the earlier penalty of ?25 crore imposed in August. In its demand notice, the regulator ordered the firm to pay ?26 crore, which includes interest and recovery charges.

In August, the regulator barred an industrialist and 24 others from the securities market for five years over allegations of fund diversion from a financial services company. A penalty of ?25 crore was also imposed on the individual, who was further prohibited from serving as a director or key managerial personnel in any listed entity for five years.

In early November, the regulator issued demand notices to six entities, including the promoter group of the financial services firm, directing them to pay ?154.50 crore. Last week, six entities—including the financial services firm and several former officials—were instructed to pay ?129 crore in penalties.

On Tuesday, the regulator also ordered two additional entities to pay ?52 crore in fines related to the same fund diversion case.

Several global financial institutions and an investment fund on Wednesday acquired a total of 1.77 crore shares, amounting to 6.82% equity, in a listed housing finance company through open market transactions worth ?1,664 crore.

According to bulk deal data available on the stock exchange, one major global investment firm, through its regional subsidiary, purchased over 1.42 crore shares (5.4% stake) in two separate trades. Another investment fund bought 17.90 lakh shares, while a European financial institution acquired 17.09 lakh shares, as per the data.

The shares were purchased at an average price of ?939.30 per share, bringing the combined deal value to ?1,664.55 crore. The shares were offloaded at an average price of ?939.42 per share.

Following the transactions, a prominent US-based private equity investor saw its stake in the company fall to 10.44% from 19.87%. Details of the other buyers were not disclosed.

Earlier in July, the same private equity investor had divested an additional 12.8% stake in the housing finance company for ?2,578 crore.

Shares of the housing finance company closed 6.90% lower at ?915.35 on the stock exchange.

In a major strategic move, a leading private-sector bank has decided to divest several key commercial properties inherited during its 2023 merger with its former parent organisation, according to persons familiar with the development. Monetisation of these assets, which include residential apartments, is expected to fetch around ?3,000 crore.

The properties identified for sale include a prominent commercial building in South Mumbai’s Churchgate area and residential units previously allotted to senior officials of the merged entity. Commercial assets spread across South Mumbai, Kalina, Chandivali, and cities such as Kolkata, Mysore, and Bengaluru are valued at approximately ?2,400 crore, while residential apartments are estimated at around ?800 crore.

The South Mumbai commercial building was acquired by the merged entity’s predecessor in 2014 for ?300 crore. Prior to this purchase, the organisation had been a tenant in the 153,000 sq ft property. However, the bank has decided to exclude another prominent building, formerly serving as the headquarters of the merged entity, from this monetisation plan.

This move also reflects the bank’s proactive approach in leveraging the current surge in demand within the commercial real estate market, supported by economic recovery and growing interest from both domestic and international investors.

A regulatory authority has proposed reforms to simplify the insolvency process for real estate companies and strengthen protection for stakeholders. The suggested changes aim to make real estate insolvency proceedings more efficient and effective.

According to a recent discussion paper, one key proposal is to include land authorities as invitees — without voting rights — in creditor committee meetings. In insolvency cases involving real estate companies, land authorities play an essential role, yet they currently do not have mandatory representation in these meetings. Their participation is expected to improve clarity on regulatory compliance and enhance the practicality of resolution plans.

The paper also raised concerns about cancelled land allotments during insolvency proceedings. It suggested that professionals handling the process should report such cancellations to the creditor committee, enabling stakeholders to decide whether to continue with the resolution process or opt for liquidation.

The regulator has invited feedback on these proposals by the specified deadline. After reviewing the responses, it plans to frame the necessary rules under the relevant provisions of the insolvency framework.

A real-estate developer has signed an agreement to develop a senior living project on approximately 12.50 acres of land located on Kanakapura Road, Harohalli, Karnataka. The planned housing project is expected to have a saleable area of around 11 lakh sq ft.

The agreement has been signed with three landowners, and a joint development agreement is expected to be finalised within the next six months.

In a separate update, the developer announced that it has entered into a lease agreement for another group housing project on 20 acres of land located in the social infrastructure zone of a major integrated township in Jaipur. The project is estimated to have a saleable area of around 20 lakh sq ft.

The lease deed for this project is expected to be executed within the next 90 days.

In its latest chargesheet related to an alleged financial misconduct case, investigators stated that loans amounting to ?4,733 crore provided by a private lender were diverted to a group of builders who had not settled their earlier dues with the bank.

According to court documents reviewed, the agency alleged that a senior official of the bank approved these loans in exchange for ?600 crore received as undue benefit through entities linked to his family members.

A fresh supplementary chargesheet has been filed against 41 accused individuals and entities connected to the matter. Investigators stated that between 2009 and 2017, several builders obtained multiple loans from the lender but failed to hand over properties to buyers who had already paid part or full amounts.