Tag: APREA

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Lower home loan interest rates to continue for the next 12 months, to push home sales: Mr Keki Mistry, Vice Chairman & CEO, HDFC Ltd

Nov 27, 2020 by Gouri Achary 0 Comments #APREA, #home loan interest rates, #Mr Neel Raheja, #Mr Vikram Garg, #Mr. Irfan A. Kazi, #Mr. Keki Mistry, #NAREDCO, #SWAMIH fund

Calling the existing home loan rates the lowest in the last four decades, Mr Keki Mistry, Vice Chairman and CEO, HDFC Limited has predicted that the lower interest rates regime will continue for another six to twelve months that will give the best home buying opportunity for the home buyers. He was speaking at the ongoing virtual NAREDCO’s ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020 in association with APREA.

“The home loan rates have been the lowest in the last four decades. For the next six to 12 months, the benign interest rates environment will continue. The growth in the economy and real estate has been sharp. The factors like the RBI infusing much-needed liquidity into the sector, various concessions are given by the Government and the developers like the stamp duty relaxations have extended the best buying opportunity for the homebuyers. The trend will continue with the lowest interest rates regime,” he added.

Mr Mistry cautioned that the RBI may face some pressure owing to the higher inflation that will reduce its ability to cut the rates further. He also observed that the banks are now distinguishing between the strong and weak developers for lending, hence improving the quality of balance sheets, avoiding over-leveraging and staying well-capitalised will help the developers float well in the market. Mr Mistry also predicted that the investments in creating co-working spaces will grow in the near future and more consolidation will happen at the projects level.

Citing that the festive season around Diwali this year has witnessed a major turnaround for the residential real estate segment by registering a growth of 83 per cent in the number of residential units and the growth in the sales value by 72 per cent over the last year, Mr Anuj Puri, Chairman and Founder of Anarock Property Consultants observed that the affordable housing segment will continue to grow. “The residential sales in July to September quarter is 67% of the Q1 sales of Jan to March 2020, which is a clear indication that the affordable housing segment is back in action,” he added.

In the commercial segment, Mr Puri signalled that this year, about 23 million sqft of new office space leasing is expected while the REITs will continue to attract foreign investments. He informed that the rent collection has been between 97 % to 99.5% during the April to October period that indicated a revival in the office segment. “The joint efforts of APREA and NAREDCO in liasioning with the Government to boost the REITs framework in the country have driven heavy investments in this segment,” said Mr Puri. He further observed that the residential realty was lacking liquidity and the gap could be well filled up by the private equity funding, for which the realty sector needed to have a meaningful dialogue with the Government to attract private equity investments into this segment.

Mr Neel Raheja, President, K Raheja Corp indicated that “The start of the pandemic saw a few months of zero sales but soon people realized the value of owning a home which saw a severe turnaround. The volume will increase in the coming months and we expect the momentum to continue.”

“On the commercial front, the new leasing market has been slow due to the uncertainty of the pandemic. We are seeing a trend of offices shifting from Nariman Point to BKC; few of the companies are also preferring to move to far-off areas like Navi Mumbai, Thane, etc. Also, we can see 75-80% of the demand for offices is coming from global companies. People cannot continue to work from home for a longer period of time and we expect the commercial market to be back once things start to move slowly,” he further added.

Mr Vikram Garg, Managing Director, Blackstone observed that as the global interest rates have been low, the global fund managers are bullish on the country like India. The domestic individuals have found a great investment class, which has created large investment opportunities as a saving instrument.

NAREDCO and Asia Pacific Real Estate Association (APREA), a leading pan Asian trade association with a focus on cross-border real estate investment, along with knowledge partner Anarock have organized this virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020’ with the theme of ‘India – Opportunities in the Coming Year’.

Key Quotes:

Sharing his insights into the SWAMIH Fund, Mr Irfan A. Kazi, Chief Investment Officer, SWAMIH Investment Fund said “In our funded projects, the emphasis will entirely be on construction. The developer has to complete the project regardless of whether the sales are happening or not. The fundamental reason why this funding is coming-in is based on the premise that the completed inventory will sell. The SWAMIH funding is not only for stalled projects but it is also for the stressed projects where the pace of construction has been hampered due to lack of funding.”

News

NAREDCO Maharashtra announces Zero Stamp Duty for home buyers on its members project in Maharashtra until 31st December 2020

Nov 25, 2020 by Gouri Achary 0 Comments #APREA, #Mr Ashok Mohanani, #Mr Sandeep Runwal, #Mr Shobhit Agarwal, #Mr. Keki Mistry, #Ms Sigrid Zialcita, #NAREDCO

Bringing back the homebuyers into the State’s residential real estate sector, NAREDCO Maharashtra has announced yet another spell of zero- stamp duty on housing sales until 31st December 2020. The decision will allow more homebuyers to buy affordable and luxury residential properties at the lowest ever prices during the pandemic. Over 1,000 NAREDCO Maharashtra members have offered their properties for sale under this scheme.

Buoyed with a demand upsurge that pushed the housing sales in Mumbai and Pune to top the national sales charts with a share of 41 per cent, NAREDCO Maharashtra is eyeing a similar kind of growth in the residential segment by 31st December due to the developer–borne stamp duty waiver. NAREDCO informed that the zero-stamp duty pushed Mumbai’s residential realty sales by 300 per cent from August 2020 to October 2020. The trade body also expects a major policy upheaval like the affordable rental policy of the Government, the proposed Housing Policy of the Maharashtra State and the Finance Minister’s announcement providing tax relief to both the developers and homebuyers with respect to the relaxations granted under the Section 43 (CA) and Section 56 (2)(X) of the Income Tax Act. These policies together will play a major role in shaping up the demand.

With a sharp demand correction over the pre – COVID levels, the apex body of developers is now eyeing to tighten the liquidity for the sector’s growth by calling upon the foreign investors to invest in eligible projects. Supported by a solid ‘thrive – back’ story of the sector during the pandemic, the Government’s pro-industry reforms and euphoric realty buying sentiments in the country, the trade body is set to pitch for funding with the foreign investors in a three–day virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020’ that will begin from 25th November, 2020.

Mr Ashok Mohanani, President, NAREDCO Maharashtra announced the event at the Press Conference today. The event is organized jointly by NAREDCO and Asia Pacific Real Estate Association (APREA), a leading pan Asian trade association with a focus on cross-border real estate investment, and promotion of real estate as a preferred investment asset class across the Asia Pacific and beyond. Anarock will be the knowledge partner for the event. The theme of the Summit is ‘India – Opportunities in the Coming Year’. It will bring the developers, the foreign investors and the policymakers on one platform to boost investments in the Indian Real Estate and Housing sector.

Announcing the decision of a zero – stamp duty until 31st December and the proposed Summit, Mr Ashok Mohanani, President, NAREDCO Maharashtra said, “It’s a win-win for both the homebuyers and the developers, as the zero-stamp duty window will bring more homebuyers of Maharashtra into the buying net. It will not only push the housing sales trajectory; but also send positive signals to the foreign investors to accelerate their investment plans into the sector flushing more liquidity to tighten the supply side. With aggressive measures such as the stamp duty waiver, the launch of HousingForAll portal, ease-of-doing-business climate, the foreign investors will start investing heavily in A-Graded income-generating asset–classes; where Maharashtra’s real estate space will remain at the centre.”

NAREDCO has pegged the substantial amount of foreign investment flows into the Indian real estate sector in the next two years. The trade body is expecting a strong action by the foreign investors in the ensuing period and expects major foreign funds like Blackstone, Brookfield, GIC, Xander, Ascendas, CPPIB, Warburg Pincus and Goldman Sachs expanding their investments into the sector. The Summit partner Anarock predicted USD 8 Billion capital inflows in the Indian realty sector in the next fiscal. The capital will be pumped in various asset classes across Residential, Commercial, Logistics, Data Centres, etc.

APREA believes the market capitalization for the Asia Pacific (APAC) real estate markets has grown over 400% in the last 15 years and have outperformed the broader markets in the past 20 years with increasing participation from institutional investors. Over 50% of investments in India is in the real estate and the sector is expected to reach a 1 trillion USD mark in the next few years. The Institutionalisation is expected to continue.

Mr Rajan Bandelkar, Vice Chairman, NAREDCO Maharashtra said, “The zero stamp duty intervention set the precedence and boosted the entire sector in a growth mode. It ensured a quick inventory turnover and the trend will continue in the long-run. The next fiscal will see more liquidity with the foreign investors coming in action.”

Mr Sandeep Runwal, President-Elect, NAREDCO Maharashtra said, “The bullish foreign funds will provide clean funds to the developers to expand their operations. This will help complete projects and bring a level–playing field among the organized developers. The lower tax regime has given volumes without impacting the Government’s revenues.”

Ms Sigrid Zialcita, CEO, Asia Pacific Real Estate Association (APREA) said, “We expect the region’s real estate investments to rebound and to register inflows of over USD 660 billion next year with China and India remaining the region’s top emerging markets. This regains most of the ground lost in 2020, as conducive financing conditions, pent-up demand as deal-making restarts and the rollout of successful vaccine headlines the recovery. We at APREA have incessantly endeavoured to raise awareness amongst the investors, across all our APAC chapters including India. India real estate sector is set to attract Institutional Investments underpinned by fast urbanization, favourable regulatory norms and high demand for residential and office premises across India.”

Mr Shobhit Agarwal, the Managing Director and CEO of Anarock Capital Advisors, said, “Decentralisation is the theme that is going to get prominence in real estate; not just in India but across the world. The ongoing pandemic has taught us that proximity to home is more important than the scale of it. Be it offices, Medicare, hospitality or warehousing; companies will start focusing on decentralising the facilities rather than having the mega centralised facility.”

The Summit will be graced by dignitaries like Shri Hardeep Singh Puri, Minister of State (Independent Charge) of the Ministry of Housing and Urban Affairs; Shri Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs, Government of India; Mr. Keki Mistry, Vice Chairman, HDFC Ltd; Ms Sigrid Zialcita, CEO, APREA.