NAREDCO pitches for raising tax exemption limit on home loan interest to rs 5 lakh

Realtors' body NAREDCO on Tuesday suggested that the tax exemption on interest on self-occupied property loans should be increased to Rs 5 lakh in the upcoming budget from Rs 2 lakh currently to boost housing demand amid a rise in housing prices and mortgage rates. Builders also sought some tax incentives to boost demand and supply of affordable homes. NAREDCO noted that under Section 24 of the Income Tax Act, the deduction allowed on interest on loans for self-occupied property is limited to Rs 2 lakh.  The realtors' body mentioned that currently the annual value of property held as stock-in-trade and not let out is considered nil for up to two years from the end of the financial year in which the construction completion certificate is obtained. After this period, the notional income is taxed. Moreover, longstanding sector demands, such as granting industry or infrastructure status and raising tax exemption limits on home loan repayments, should be considered to sustain long-term growth in the housing sector. 
 

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NBCC interested in taking over all of Supertech's pending projects

State-owned construction company NBCC has shown interest in taking over all the pending projects of real estate developer Supertech, which has been facing multiple cases from homebuyers over delayed deliveries besides an Enforcement Directorate investigation into alleged money laundering. During the insolvency proceedings of one of the group companies of Supertech, the interim resolution professional (IRP) had approached NBCC. NBCC has informed IRP and lender Union Bank of India that it is ready to take all the projects of Supertech, provided it is given complete access to the details of the projects and all the data related to them. The Noida-headquartered real estate developer has to deliver over 15,000 homes. National Company Law Appellate Tribunal (NCLAT) order on July 8, attorney general Venkat Ramani has submitted before the court that he has received instructions that NBCC is interested in undertaking the projects subject to due diligence and that lenders of the Supertech are not averse to the proposal of NBCC. The bankruptcy court had ordered Corporate Insolvency Resolution Process (CIRP) against Supertech Ltd, one of the companies of the Supertech group, based on a petition filed by Union Bank of India for non-payment of around Rs 432 crore of dues. The company has already submitted a proposal to the Uttar Pradesh government for the revival of the company. According to the proposal, the dues to the land authority amount to Rs 2,670 crore, with almost half of this being interest on the land cost. The company also owes Rs 830 crore to various banks. It also requested about Rs 5,000 crore from lenders to complete the stuck projects.
 

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Average time to complete large residental projects dip 20 percent in last decade 

The last decade (2014-H1 2024) has seen homebuyers' wait for possession in large under-construction projects in the top seven cities reduce to 4.9 years, from 6.1 years in the 2010-2019 period, according to Anarock data. For all large projects launched and completed between 2014 and H1 2024, the average compeltion time was lowest in Chennai with 3.6 years, while Hyderabad and Bangalore clocked in at 4.2 and 4.8 years respectively. In NCR, extreme weather conditions and the statutory restrictions imposed on construction when the pollution levels rise also play affect construction timelines in the region. Most developers have gradually reduced their  leverage and with stronger financial conditions, are able to focus on execution. In Kolkata, large projects launched and completed between 2014 to H1 2024 took the longest average time to complete, at 5.7 years while in Mumbai Metropolitan Region (MMR), it took an average of 4.7 years to complete small projects, and around 5.2 years for large projects. In Pune, the average project completion time was 4.3 years for small projects, and 5.4 years for large ones. In Chennai and Hyderabad, the average completion time for small projects was 3 years and 3.1 years respectively, and 3.6 and 4.2 years for large projects, respectively. In Bangalore, it was 3.5 years for small projects and 4.8 years for large ones.

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Supply of affordable housing dips 21 percent in top seven cities in Q1 FY25 

New supply of affordable apartments costing below Rs 50 lakh declined 21 per cent in the April-June period across seven major cities as builders are launching more premium flats, according to JLL India. Real estate consultant JLL India on Friday released data for housing market of major seven cities, showing a 5 per cent increase in fresh supply of apartments to 1,59,455 units during April-June 2024 from 151,207 units in the year-ago period. The data includes only apartments. Rowhouses, villas, and plotted developments have been excluded from the analysis. Of the total new supply in the June quarter, the launches of affaordable flats stood at 13,277 units, a fall of 21 per cent from 16,728 units in the same period last year. The launches of flats, each costing Rs 50 lakh to Rs 1 crore, declined 14 per cent to 47,930 units from 55,701 units. The launches of apartments, each priced Rs 3-5 crore, more than doubled to 19,202 units from 7,149 units. Similarly, in above Rs 5 crore category, the new supply jumped more than two-fold to 9,734 units from 4,510 units.On demand, the consultant said the sales of apartments across seven major cities rose 22 per cent to 154,921 units during April-June 2024. 

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No Project can fail if builders maintain financial discipline Haryana RERA member

No real estate project can fail if developers maintain financial discipline from the very beginning, Sanjeev Kumar Arora, member of Gurugram bench of Haryana regulatory authority, said. Addressing Assocham's National Conference on Changing Dynamics of Real Estate for Viksit Bharat, he also pitched for reduction of interest rates on home loans to boost demand. He spoke about the role of the real estate sector in the Indian economy,  especially in creation of employment opportunities. "There is a need of rationalisation of interest rates, because once the lending rates are reduced, certainly the investors or the homebuyers come forward. And builders are also happy to deliver at least possible costs," Arora said. Talking about real estate law RERA, Arora, a member of Gurugram bench of Haryana Real Estate Regulatory Authority (HRERA), said about 1,25,000 projects have been registered under RERA since the enactment across India while 75,000 brokers also have registered.  Real estate is a Rs 24 lakh crore market, and its GDP contribution is around 13.8 per cent, he added. Urbanbriq Development Management Pvt Ltd Director Vineet Relia said there could be a downcycle if the government doesn't support this sector in the coming years with regards to affordability.

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Piramal Capitaland Housing Finance raises rs 835 crore through social loan

Piramal Capital & Housing Finance raised its maiden dollar syndicated social loan of $100 million (?835 crore). The entire loan is pre-funded by Standard Chartered Bank and the foreign lender is expected to syndicate the loan in the next few months. The loan has a three-year maturity, and it is benchmarked to the three-month secured overnight financing rate (SOFR) plus 200 basis points. The prevailing SOFR is 5.3%. "Through this loan, we are trying to tap the overseas market and since a large part of our financing gels well with the social theme, this loan is the first of many to come," a Standard Chartered Bank official said on condition of anonymity. "All highly-rated NBFCs have to start looking at some amount of financing from the international markets and this route is expected to pick up pace. In fact, there is a lot of global investor appetite for ESG space." Standard Chartered Bank is the social loan coordinator for this transaction and the sole mandated lead arranger, underwriter and book-runner. Social loans are used to fund projects that have a social cause, like a welfare project, affordable homes or environmentally sustainable projects among others. Last month, Shriram Finance raised more than $450 million through a Last month, Shriram Finance raised more than $450 million through a syndicated term loan. Mortgage loans, comprising home and small business loans, account for 68% of the overall retail AUM Such loans grew at a robust 38% in FY24. The lender expects 15% AUM growth in FY25 to around ?80,000 crore. 
 

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Tata Realty secures rs 825 crore from IFC to refinance IT park in Chennai

Tata Realty, a subsidiary of Tata Sons, has secured an Rs 825 crore loan from the International Finance Corporation (IFC) to refinance Ramanujan Intellion Park situated in Taramani, Chennai. Ramanujan Intellion Park has achieved a complete reduction of emissions through renewables or carbon off-sets, saving more than 20 percent on water and embodied energy in materials while attaining over 42% percent energy savings on-site. The financing from IFC is a strategic investment in advancing our efforts enhance the sustainability and climate resilience of Ramanujan Intellion Park." The 25.27-acre IT park encompasses both a special economic zone (SEZ) processing area and a non-processing zone. It has a total leasable area of approximately 4.67 million sq ft of IT/ITES commercial office spaces. 
 

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HDFC Capital to invest $2 billion in affordable housing segment by 2025 end

HDFC Capital Advisors is betting big on affordable and mid-income housing withs plans to invest more than $2 billion in this segment across India's top property markets by the end of 2025 to support easing od supply side constraints, said a top company executive. The world's largest affordable housing platform that counts Abu Dhabi Investment Authority (ADIA) as its key investor is in the process of achieving its medium-term goal of financing 1 million affordable homes in India through existing platforms set up with leading developers. The government has just announced support for 3 crore affordable houses including 1 crore homes in urbans areas. This is a $500 billion business opportunity and would need investment of at least $100 billion The fund is looking to deploy at least $1 billion annually over the next two years in affordable and mid-income housing across top 15 indian cities including Mumbai region, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad, he said. India has entered a period of demographic dividend which is expected to continue for the next 30 years. The purchasing power of India is going to lead to a consumption boom as more than 200 million households will form part of the upper middle class and above category by 2030. In HDFC Capital’s portfolio, unit ticket prices start from Rs 12.50 lakh and around 40% of its portfolio comprises units priced at less than Rs 42 lakh. It has so far invested across over 175 projects, helping develop over 250,000 units. HDFC Capital’s target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships, and technology, whilst focusing on sustainability.
 

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Global capability centres drive office leasing in Jan June 2024 

Total ofice leasing by Global Capability Centres  (GCCs) in the first half of 2024 accounted for ~37% of the overall office easing in India, according to a recent report by CBRE. GCCs leased 11.9 million sq ft office space in Jan-Jun 2024 period. BFSI firms and technology companies contributed to about 45% of the total leasing by GCCs during the same period. Bengaluru had the highest share of GCC leasing, at 39%, followed by Pune at 20%, while Hyderabad and Chennai at 17% and 11%, respectively, during Jan-Jun 2024. On a pan-India basis, overall office leasing remained strong, with gross office leasing touching 32.8 mn. sq. ft. during Jan-Jun 2024, recording an increase of 14% year-on-year across nine cities, the second-highest H1 leasing. The nine cities include Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune, Kochi, Kolkata, and Ahmedabad. According to the report, total supply of 22.1 million sq. ft. was recorded during Jan-Jun 2024 period.  Bengaluru led office space absorption, accounting for about one-fourth of the total leasing during Jan-Jun 2024 period, followed by Delhi-NCR at 16%, Chennai at 14%, Pune and Hyderabad each contributing 13%. Bengaluru, Hyderabad, and Mumbai led supply additions, collectively accounting for 69% of the total in the same period. The report indicates technology companies saw the highest share and accounted for 28% of the total office leasing, followed by flexible space operators at 16%, BFSI firms at 15%, engineering and manufacturing (E&M) at 9% and research, consulting & analytics firms (RCA) at 8% during Jan-Jun 2024. On a quarterly basis, office leasing in Apr-Jun 2024 stood at 18 million sq ft, a 27% increase compared to Apr-Jun 2023. Bengaluru, followed by Pune and Chennai led the absorption in Apr-Jun 2024, together accounting for about 57% of the leasing activity. Development completions of about 13.2 million sq ft was witnessed in Apr-June 2024, up by 49% quarter-on-quarter, and 11% year-on-year. Technology companies held a share of 29% in leasing activity in Apr-June 2024, up from 26% witnessed in Jan-Mar 2024. This was followed by Life sciences firms accounted for a 9% share in leasing. During Apr-Jun 2024 period, American firms led the absorption, accounting for a share of ~39%.
 

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Bandra police file FIR against ex employees for data theft impacting real estate firm

The Bandra police registered an FIR on Tuesday against three former employees of a real estate service company for abruptly resigning from their positions in May and allegedly hacking into the company's system to steal valuable client data. The stolen information, worth over Rs 80 lakhs, has significantly impacted the firm, causing them to lose clients. The police are investigating the matter based on the complaint, which states that the three suspects have joined a Powai-based real estate company after stealing the data. the company claims that before their departure, the employees accessed and copied the firm's confidential client database, containing essential information about the company's customers and their preferences. In the FIR, Kadilal stated that the theft of the client database has severely affected the company's business operations, as it heavily depends on this information to maintain client relationships and generate revenue. The loss of this data has left the company struggling to retain existing customers and attract new ones, resulting in substantial financial losses. The Bandra police have registered a case against the three former employees under the Indian Penal Code sections for criminal conspiracy and theft by servants. However, no arrests have been made yet, and the investigation is ongoing. 
 

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Leasing of workspace in January to June up 29 percent to 33 54 million 

Office demand across seven major cities hit an all-time high in the first half of this calendar year with gross leasing of 33.54 million square feet, according to JLL India https://www.jll.co.in/ . Real estate consultant JLL India https://www.jll.co.in/ on Wednesday released the data of office demand for the January-June period of this year which saw 29 per cent annual growth in gross leasing to 33.54 million square feet across these seven cities -- Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad and Pune.

"H1 2024 (January to June) marked the best-ever first half, with leasing volumes at 33.5 million sq ft, surpassing the previous highest H1 performance seen in 2019," the consultant highlighted. Gross leasing of office space stood at 26.01 million square feet in the January-June period of 2023. In January-June 2019, the gross leasing of office space stood at 30.71 million square feet, but the numbers fell to 21.10 million square feet in January-June 2020 and 12.55 million square feet in January-June 2021 due to a slowdown in demand because of the COVID pandemic. The office demand bounced back post-COVID. In January-June 2022, the gross office leasing stood at 24.68 million square feet. Gross leasing refers to all lease transactions recorded during the period, including confirmed pre-commitments, but does not include term renewals. Deals in the discussion stage are not included. 2024 projected to mark record-breaking gross leasing of 65-70 million sq. ft, setting the stage for a historic milestone in the country's commercial real estate market," JLL India https://www.jll.co.in/ projected.
 

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Capgemini to invest rs 1000 crore to set up six lakh sqft  space in Chennai

Global IT service provider, Capgemini https://www.capgemini.com/ would set up a new state of the art facility in the city and the committed investment of Rs 1,000 crore spread over the next 3 years. The construction for the 5,000-seat facility, spread across six lakh sq ft is scheduled to be completed by April 2027. It would promote a collaborative and engaging work environment featuring advanced engineering labs, dedicated pods for customer experience centers among others. The campus would integrate advanced energy and water-efficient technologies, utilise recycled materials and implement rainwater harvesting during construction. The company would foster local talent and pledges Rs 3 crore investment for the development of neighbouring schools run by the government. I congratulate Capgemini https://www.capgemini.com/ on launching the construction of this state-of-the-art facility and look forward to collaborating with them on their future endeavours," Raja was quoted as saying in a press release on Tuesday. The campus would be equipped with wellness centres, town halls, gymnasiums and cafeteria designed to enhance employee wellbeing and create a conducive work environment.  As a leader that is shaping the future of industry, we are investing in local talent and enhancing the well-being of our communities. This expansion demonstrates our strategic vision and commitment to collaborating with local government efforts to drive the country's economic growth. 

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