India Real Estate – Page 33

Revised Flat Size Norms a Major Demand Boost for Larger Homes in Tier 2/3 Cities

Anuj Puri, Chairman – ANAROCK Property Consultants

The housing ministry’s decision to tweak the eligibility criteria for MIG-I and MIG-II home buyers for houses eligible for interest benefit under PMAY is a phenomenal move to boost sales of large-sized apartments.

As per the revised norms, MIG-I category home buyers with household income between ₹ 6 lakh – ₹ 12 lakh are now eligible for a subsidy for homes up to carpet area of 160 sq. m. from the earlier 120 sq. m.

Similarly, MIG-II category home buyers with household income between ₹ 12 lakh – ₹ 18 lakh are also eligible for a subsidy for homes with a carpet area of up to 200 sq. m. from the earlier it was 150 sq. m.

This change will have a significant impact on home sales in tier II and tier III cities where the land costs and therefore capital values of properties are low and larger apartments are within the reach of such buyers.

The timing of this increase in carpet area eligibility norms is perfect, as the RBI recently decided to revise the housing loan limits for Priority Sector Lending (PSL).

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

With the implementation of accounting standard – IND AS 115, real estate developers will have to do away with the existing percentage completion method and adopt project completion method.

This is not a mere accounting change as it will have a severe impact on the ways & means in which the real estate developers run business, raise funds, price and sell projects.

Under the percentage completion method (old accounting standard), advance payments received from a home buyer towards an under construction flat were considered as revenue and added to the company’s turnover and net income generated from such projects were treated as profits.

However, under the project completion method (new accounting standard), advance payments received from a home buyer towards an under construction flat will have to be treated as loans and not income from sales. This will bear the following impact:

Real estate stock prices may witness a significant correction – stock prices are a function of the company’s profitability and leverage. With changes in the accounting standards, the price-to-book value ratio will change and will bear an impact on the current stock prices.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

When it comes to Indian real estate, the topic of NRI investments is pretty much an evergreen one. The fact that Indian developers had, in the past, launched and marketed projects with an almost exclusive eye on NRI customers is certainly no secret.

There were many reasons for this, but the primary one was that NRIs – especially NRIs based in the Gulf and the US – were seen as cash cows with more money than sense.

Time has proved this theory erroneous. NRIs are among the savviest property investors on the Indian market today. This is amply demonstrated by how adroitly they have gauged the new investment trends on the Indian real estate market.

For a long time, the returns on investments that NRIs could get on residential assets were extremely rewarding, considering the significant capital appreciation whilst the rental yields have always been low.

However, during the last couple of years, the market slowdown resulted in capital appreciation on residential assets no longer being as per NRI investors’ expectations.

In the current market conditions,

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Located in south-eastern peripheries of Pune, Undri was once a small and unremarkable village outside the Pune municipal corporation limits. After opposition from residents regarding merging of Undri into the Pune Municipal Corporation (PMC) in 1997, it was demerged in 2002.

In 2017, Undri came under the purview of the Pune administrative authority – Pune Metropolitan Region Development Authority (PMRDA). Many residents of the region, whose primary occupation was agriculture, sold their land parcels to private real estate players, thus paving the way for rapid growth of residential and commercial developments in Undri.

Surrounded by micro-markets such as Hadapsar, Pisoli, and Handewadi, Undri offers relatively serene surroundings with thick green cover. It has good social infrastructural facilities including educational institutions, healthcare facilities, and entertainment options.

Various IT-ITeS establishments including Magarpatta City in Hadapsar, Eon Free Zone in Kharadi and SP Infocity in Phursungi have created massive residential demand in and around the regions, eventually hiking property prices in these areas.

Undri caught the spill-over demand from these nearby markets with its relatively lower property values.

by Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Despite being hit by the overall slowdown in the real estate market and seeing price corrections up to 10% in most areas, Delhi-NCR continues to be attractive to end-users and investors. Being the national capital, Delhi attracts migrants from all across the country.

In fact, as per the Economic Survey of 2017, Delhi, Noida, Greater Noida and Gurugram saw the maximum influx of migrants between 2001 and 2011. Obviously, there is a dire need to fulfil the housing needs of these migrants.

As per ANAROCK data, the housing supply in Delhi over the last two years has been fairly low as compared to its counterparts – Gurugram and Noida. This is essentially due to demand-supply mismatch; there is massive demand for affordable housing in the city, while property prices in most pockets of the city have skyrocketed.

Consequently, the pockets that offer affordable or mid-segment projects have been performing relatively better than the expensive ones – such as Greater Kailash II, Panchsheel Park and South Extension II, to name a few.

In 2018 as well,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The Union Cabinet’s amendment to the Insolvency and Bankruptcy Code now effectively treats homebuyers as financial creditors and comes as a massive relief to them.

Residential property buyers are now effectively considered at par with banks and other institutional creditors when it comes to recovering dues from real estate developers who have gone bankrupt.

However, it needs to be seen how the resolution mechanism for claiming the dues actually falls in place for the concerned homebuyers. In fact, to be truly relevant, the entire implementation process needs to be clarified to homebuyers.

They need to know how exactly they will be represented in the creditors’ committee – in other words, whether the NCLT will appoint a resolution professional to represent their rights and interests.

That said, this amendment will certainly go a considerable way in bringing more transparency into the overall funding of projects across the country. With homebuyers now getting the opportunity to claim their dues from builders, there is an even stronger burden on developers to deliver on time.

We will now see builders become more cautious while taking funds from financial institutions and banks,

by Arun Chitnis

PRESS RELEASE

HVS And ANAROCK Join Forces To Tap Into India’s $210 Billion Hospitality Market

Partnership to boost HVS India’s annual turnover by up to 75%
Multiple big-ticket hotel funding, divestments & acquisitions already underway

Mumbai, 17 May 2018: India’s leading real estate services firm, ANAROCK Property Consultants, today announced its partnership with HVS, the global hospitality sector leader.

As a new business vertical under the ANAROCK Group, HVS ANAROCK will focus on brokerage, feasibility studies, operator searches, appraisals, executive search and other hospitality sector consulting and advisory services throughout South Asia.

Anuj Puri, Chairman – ANAROCK Property Consultants takes on the added role of Chairman – Hospitality at HVS ANAROCK and the Firm’s soon-to-be-appointed CEO will report to him. Shobhit Agarwal, MD & CEO – ANAROCK Capital will head the transactions vertical at HVS ANAROCK.

Stephen Rushmore Jr, President and CEO – HVS, commented, “We are very excited to partner with ANAROCK as we share a strong professional and cultural fit.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The Government’s approval on the long-pending Mumbai DP 2034 is a welcome move.

The DP is likely to spur real estate activity in the city and also pave the way for the development of much-needed affordable houses in Maximum City.

Let’s look at the major highlights and likely impacts of this Development Plan:

Highlights of DP 2034

Overall NDZ is 16,700 hectares of which around 12,900 have now been classified as Natural Area (NA), which includes parts of Sanjay Gandhi National Park, Mangroves, salt pans and parts of Film City and Aarey milk colony, along with a few regions under CRZ.
DP 2034 proposes to unlock 3,700 hectares of public and private land currently tagged as No Development Zones (NDZ) – this massive land unlocking will open new avenues for real estate development
There is a target to construct 10 lakh affordable homes through unlocking of NDZ – this is a major push for the affordable housing segment, and much needed to accommodate the ever-increasing population in the city
The largest additions to the city’s developable land banks in recent history
FSI levels in the Island City are raised up to 3,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Why RERA is still not a nation-wide market force

Many state governments have been lax in implementing RERA. There are various forces at play – the primary one being an aversion to change.

RERA was conceived to change the entire status quo of how real estate is designed, developed and sold in India. It intends to put paid to fly-by-night players – both developers and brokers – who have held the real estate market to ransom all these years.

While the larger organized developers and consultancies have welcomed and embraced RERA for the transparency and regulation it brings to the market, the unorganized segment – players who are not happy with RERA because it seriously impacts their questionable business models – far outnumber the organized one.

In a democracy, the ‘majority vote’, whether spoken out loud or implied by lack of cooperation, wields weight. This majority vote is slowing down the process of RERA’s nation-wide deployment in the shape and to the extent which the Centre intends. Moreover, individual states also have always had the right come up with their own set of rules.

by Anuj Puri

Anuj Puri, Chairman, ANAROCK Property Consultants

I had the honour of being featured on the cover of Construction Week magazine this month. It was an incredibly interesting interview with the magazine’s dynamic editor, Jayashree Kini-Mendez.

Here are some excerpts:

What the Indian real estate sector requires today

In my opinion, only disruption can save the day for the Indian real estate sector. Both because of the groundbreaking policy reforms now in place and the changing mindset of real estate consumers, the old ways of doing business simply cannot prevail any longer.

What is required are new ideas, new ways of conducting business, and a far greater focus on accountability and transparency than has been evidenced by the industry so far. ANAROCK Property Consultants is a new benchmark for impeccable values, corporate governance and customer-focus in the Indian real estate space.

On my entrepreneurial streak

If one has it, the entrepreneurial streak is not something that will be denied for very long. I had to fulfil my obligations to my previous firm in the manner which the role required of me,

Revised Flat Size Norms a Major Demand Boost for Larger Homes in Tier 2/3 Cities

Change In Accounting Standards – Impact On Real Estate

The Changing NRI Real Estate Investor Landscape

Undri, Pune – from Nondescript Hamlet to Residential Hotspot

Delhi-NCR Real Estate – The Growth Story Continues

Amended Bankruptcy Code Deals An Ace To Homebuyers

HVS And ANAROCK Join Forces To Tap Into India’s $210 Billion Hospitality Market

Mumbai DP 2034 Receives the Government’s Nod

RERA In Real Time – Nowhere Close To The Finish Line

The Quiet Iconoclast – A Cover Story In Construction Week (April 2018)