Investors prefer single owned and managed commerical properties 

Investors in India's commercial real estate market are increasingly preferring single-owned and managed properties over strata-owned ones as they offer higher returns, operational efficiency, and greater attractiveness, according to experts. The rental yields for commercial assets across key property markets have been a major indicator that clearly shows that single-owned commercial properties are outperforming their strata counterparts that have multiple owners and operators. This streamlined approach, according to experts, ensures that properties are well-maintained and can quickly adapt to market demands or tenant needs. In contrast, strata properties often face management challenges due to multiple owners, leading to delays in maintenance and decision-making processes. Occupiers are increasingly leaning towards single-owned properties due to the consistent and reliable building management they offer. Single ownership ensures that the property is managed with a unified vision, which translates to better maintenance and faster resolution of issues. A single-owner can implement upgrades and market the property with a clear and consistent strategy, directly impacting the property’s market value positively. Investors are also recognising the benefits of single- owned properties, including higher returns and better value retention. The operational efficiency and higher tenant satisfaction associated with single ownership make these properties a more attractive investment. Occupiers, on the other hand, prefer the reliability and consistency of single-owned properties, which translates to a better overall experience.
 

https://www.livehomes.in/news_letter

Chennai Metro tunnelling compeleted between Ayanavaram and Otteri 

A tunnel boring machine named Anaimalai compeleted tunnelling between Ayanavaram metro and Otteri metro on Thursday and achived a breakthrough as part of the 116.1km phase-2 project. A release said Anaimalai, which started tunnelling on October 23, 2023, built a 925metre-long tunnel and reached the shaft at Otteri metro. CMRL managing director M A Siddique and other officials were present during the breakthrough event. The stretch from Ayanavaram to Otteri is part of the 9km underground section on the 45.4km corridor-3 from Madhavaram Milk Colony to Siruseri Sipcot. A total of seven tunnel boring machines have been mobilised for tunnelling work in the stretch.  Phase-2 has three corridors covering 116.1km. A total of 23 tunnel boring machines will be used for tunnelling work in the project.

https://www.livehomes.in/news_letter

New Commitee appointed to study amendments  Maharastra apartment onwership act

A new 10-member committee was appointed by the state government last week to study amendments to the Maharashtra Apartment Ownership Act, 1970. In October last year, a 15-member panel had submitted recommendations on the amendments. The move has raised eyebrows of activists in the housing sector. The state has 1 lakh buildings under the Apartment Act, including 15,000 in Pune district. Commissioner for Cooperation and Registrar of Cooperative Societies along with members of the property registration department, Pune collector and officials of the law department. Ownership Act, Rules and Bye Laws to State Cooperative Department so the constitution of a new committee without any experts such as Pune Federation, a parent body of apartments in Pune or The Maharashtra State Housing Federation is a matter of concern. Commissioner for Cooperation Deepak Taware said that he would submit the report in consultation with the members. The Maharashtra Apartment Ownership Act, 1970, governs the ownership, management, and transfer of apartments in the state. Maharashtra State Housing Federation chairperson Suhas Patwardhan MK Rao, a member of an apartment association, said that while the suggestions act was to make way for more redevelopment proposals, eviction of those obstructing redevelopment won’t be easy. 

https://www.livehomes.in/news_letter
 

Brigade Group to invest Rs 8000 crore in Chennai by 2030

Brigade Group plans to invest over Rs 8,000 crore by 2030 to expand its portfolio in Chennai with a pipeline of over 15 million sq ft, of which the residential segment comprises of over 12 million sq ft. The gross development value (GDV) of the residential projects is estimated to be over Rs 13,000 crore. In FY25, the company plans to launch over three million sq ft of residential projects and about 1 million n sqft of commercial development in Chennai. The company recently launched Brigade Icon Residences which will have G +38 floors, featuring three, four and five bed apartments from 2,500 sq ft onwards and GDV will be over Rs 1,800 crore.  Pavitra Shankar, managing director, Brigade Enterprises said, "Our aim is to double our growth in the city by expanding all four verticals of residential, commercial, retail and hospitality. We have already signed MoUs with the State Government for four projects as part of their Global Investors Meet, approvals for which are in process." In Chennai, it has completed over five million sq ft. In FY25, Brigade Group plans to launch over three million sq ft of residential projects and about 1 million n sqft of commercial development in Chennai.

https://www.livehomes.in/news_letter

Uttar Pradesh government cancellation of land to M3M group in Noida

The Uttar Pradesh government has put on hold the cancellation of commercial plot allotment in Noida to M3M group companies Lavish Buildmart and Skyline Propcon and decided to review the decision. The move came after the government received appeals from the two companies as well as the reports submitted by the Noida Authority. The UP government had on May 10 cancelled the allotment of plots located in Noida's Sector 72 and Sector 94 on grounds that the allotment through e-tender process was done in violation of rules. The M3M group said it welcomed the government's decision The Gurugram-based developer told PTI that these two projects in Noida were launched 18 months ago and so far Rs 751 crore have been spent on land cost and about Rs 750 crore on project construction. We are committed to our investment in Uttar Pradesh and will ensure jobs and opportunities, along with creating a masterpiece for the state an M3M spokesperson said. The total cost of both the projects is estimated to be around Rs 5,500 crore with 45 per cent of the units already sold to 1,400 buyers who have made the investments, the group added.
 

https://www.livehomes.in/news_letter

Land Prices soar in Amaravati 

Lnad prices came down anywhere between 60% and 75% after outgoing chief minister  Y S Jagan Mohan Reddy announced his plans of three capitals in 2019. Real estate prices zoomed in Amaravati witnessing anywhere between 50% and 100% increase in just three days after the election results are out. The massive victory of the TDP, Jana Sena and BJP alliance has cleared the uncertainties over the capital, renewing the buyers' interest.
on June 12 near the All India Institute of Medical Sciences (AIIMS) in the capital region. Farmers are expecting a further increase of land prices in case of a positive statement by Modi. Land prices came down anywhere between 60% and 75% after outgoing chief minister Y S Jagan Mohan Reddy announced his plans of three capitals in 2019. All euphoria created around the proposed futuristic capital city vanished. After five years, with govt change, the realty sector in Amaravati is witnessing a 'V' shaped recovery in terms of prices. Several central government institutions like Reserve Bank of India, Comptroller and Auditor General (CAG), CPWD, Public Sector Undertakings like NTPC, ONGC, Indian Bank, State Bank of India.  and others have purchased lands to set up their regional offices in Amaravati Sources said that Naidu is looking to bring all these institutions to Amaravati as soon as possible so that the economic activity will start rolling. 

https://www.livehomes.in/news_letter
 

Robust Housing demand helps in faster inventory liquidation

Real estate developers in India are leveraging the strong housing demand to clear their existing stocks, reducing the overhang of unsold properties that had been a concern in previous years. A healthier balance between demand and supply has also stabilised the market. Residential property markets in the top seven cities - Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad and Kolkata - have witnessed a significant 31% decrease in the time taken to sell active unsold housing inventory, showed a JLL analysis. In the March quarter, the time taken to liquidate inventory dropped to 22 months from 32 months at the end of 2019, driven primarily by an exponential surge in housing demand. This assessment is based on the average sales rate observed over the last eight quarters.  While the fall in the affordable housing segment was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment's share in annual launches to 22% in 2023 from 2% in 2019. According to him, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in the first quarter of 2024, showcasing the strong sales momentum in this segment. Apartments belonging to sell its unsold inventory, with an average of 29 months as of March end. However, despite this longer selling period, the premium segment has experienced a significant reduction in inventory liquidation time due to its relatively faster sales velocity. This segment has emerged as the top performer, driven by strong buyer interest in larger homes with improved support amenities.

https://www.livehomes.in/news_letter
 

Unsold Housing stock up 24% in top seven cities

Unsold housing stocks across seven major cities have risen by 24 per cent since 2019 due to higher supply, but realty firms will take 31 per cent less time to sell these units because of high sales velocity, according to JLL India. In a report released on Thursday, real estate consultant JLL India said the actively selling unsold housing inventory has reached about 4,68,000 units by March 2024, a 24 per cent increase since December 2019, across seven major cities -- Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata. Despite this surge in unsold inventory, the consultant noted that there has been a remarkable reduction in the estimated time required to sell these properties. This assessment is based on the average sales rate observed over the last 8 quarters. There has been a "significant 31 per cent decrease in the time it will take to sell the active unsold housing inventory. In Q1 (January-March) 2024, the time to liquidate inventory has dropped to just 22 months, compared to 32 months by the end of 2019, driven primarily by an exponential surge in housing demand. Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai; Delhi-NCR includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad and Sohna.

https://www.livehomes.in/news_letter

Luxury real estate demand may see moderation in near future 

The luxury real estate segment is likely to plateau in the near-future and affordable housing may take off as the new government takes charge, said Pankaj Kapoor, founder and managing director of real estate research firm Laisas Foras. Niranjan Hiranandani, the managing director and co-founder of Hiranandani Group, said the new government should take steps to ensure affordable housing is possible in cities such as Mumbai. “Today, almost 50 percent of the cost of the house is in government taxes, charges for development, floor space index and goods and services tax. As far as affordable housing is concerned in Mumbai and the suburbs, these taxes need to come down otherwise it is just not possible. Affordable housing doesn’t exist because the government charges are just too high,” Hiranandani told CNBC-TV18. On the real estate outlook of the financial capital of the country, Hiranandani said he is upbeat and believes change in political composition in both Maharashtra and the country, following the outcome of the Lok Sabha elections 2024, will not have any impact.  Apart from the state, the Central government also has prioritised infrastructure of Mumbai. He said, “… the central government’s commitment for the city includes bullet train, Delhi-Mumbai industrial corridor… if you look at Mumbai separately, in the next two years 330 km of metro will be coming up, we have a coastal road going to be delivered in the next three months and we have a cross harbour link, which is opening a new scope of development in the city.” The support will be there as far as affordable housing is concerned despite INDIA bloc getting a higher number in the state, he said.Moreover, Hiranandani believes that the new government, which will take charge after the upcoming Maharashtra elections, will prioritise slum redevelopment. With the kind of mandate the Prime Minister Narendra Modi-led government at the Centre received, Kapoor believes affordable segment is likely to get a boost. However, he also noted that investment in infrastructure is unlikely to slowdown despite the less-than-expected mandate for the saffron party.

https://www.livehomes.in/news_letter

New Government must bring policy reforms in realty sector NAREDCO

The real estate sector is at a crucial point, with great growth potential but significant challenges. To reach a market size of USD 1 trillion by 2030 and become a net-zero carbon industry by 2047. Realtors body NAREDCO https://www.naredco.in/ on Tuesday demanded that the new government should bring policy reforms for growth in real estate sector and provide tax incentives to home buyers as well as developers to boost housing demand. The association also sought streamlining of getting approvals to develop projects. Lok Sabha elections 2024, NAREDCO National President G Hari Babu said, "The real estate sector is at a crucial point, with great growth potential but significant challenges. To reach a market size of USD 1 trillion by 2030 and become a net-zero carbon industry by 2047, we need government support." This can be achieved by setting the first Rs 20 lakh or Rs 25 lakh of a home loan at a 5 per cent interest rate for the first five years, the NAREDCO President said. Pradeep Aggarwal, Founder & Chairman, Signature Global (India), the infrastructure sector along with the real estate sector is key for achieving the goal of 'Vikshit Bharat'. We also expect the new government to address some of the challenges faced by these sectors and take the lead in convincing the GST Council https://gstcouncil.gov.in/ to ease the burden of Goods and Services Tax (GST) on both developers and consumers said. 
 

https://www.livehomes.in/news_letter

Home Loan borrowers may have repaid higher amounts 

Mortgage disbursals are far exceeding the amount of outstanding home loans indicating faster industry-level growth and a pronounced revival in incomes that has prompted end-users to prepay liabilities or reduce debt through lump-sum part payments ahead of schedule. An analysis of data showed that higher repayments and prepayments optically limit the pace of mortgage expansions. In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan market in the country was, Rs 3.62 lakh crore. But disbursements were much higher - at Rs 8.08 lakh crore. In FY24, State Bank of India, which has 25 percent of market share, said its outstanding portfolio rose 13 percent disbursements rose 17 percent and sanctions rose 21 percent. For Bank of India, the outstanding home loans rose Rs 8,000 crore in FY24, while disbursal rose Rs 23,000 crore. With the revival of the economy and improvement in the income levels, sizable borrowers of home loans are using their surplus funds to repay and prepay their loans so that the interest burden is also less, said a senior analyst with a rating agency.  In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan amrket in the country was, Rs 3.62 lakh crore .
 

https://www.livehomes.in/
 

JM Financial to fund realty projects through AIF 

JM Financial Group has decide to fund real estate projects through the alternative investment fund (AIF) route and syndications, moving away from its on-balance business model. JM Financial non-executive vice chairman Vishal Kampani said in an investors call that the group wil set up a strategic AIF for land and approval financing, using its clients realtionship to provide funding through it. The group will transition towards an investment banking-led distribution and syndication business, he said, adding that real estate developers are also finding it easier to obtain early-stage financing from AIFs rather than non-banking financial companies (NBFCs).
The group is looking to realign its wholesale credit businesses, which include real estate, bespoke, distressed credit and financial institutions financing. The wholesale lending book fell to Rs 4,917 crore at the end of March 31, down 42% from ?8,445 crore a year ago. The company said several factors led to this decision. Competitive pressures from banks have pushed down yields in key client segments, and regulatory ambiguities around land financing have created additional challenges. The recent draft regulations could see provisioning requirements for real estate and infrastructure finance go up to 5% from 0.4%, affecting the return on assets for new and existing loans. 
 

https://www.livehomes.in/news_letter