13-Dec-2019

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06-Dec-2019

CREDAI Bengal Daily News Update | 13.12.19

Residential projects falter

Poor sales growth in residential projects

The real estate consultancy firm said the year was a non-event for the housing sector in terms of sales

growth and investor interest

The disappointing trend continued in the domestic real estate sector this year with residential projects

witnessing poor growth in sales even as other asset classes such as co-working spaces and warehouses

attracted slow but steady investments.

For the industry, the only relief came from the commercial office segment, which remained the top-

ranking real estate asset class, Anarock Property Consultants said in a note on Thursday.

The real estate consultancy firm said the year was a non-event for the housing sector in terms of sales

growth and investor interest.

Sentiments remained subdued and it was only sustained by demand for ready-to-move-in or almost-

complete homes.

Newspaper/Online The Telegraph(online)

Date December 13, 2019

Link https://www.telegraphindia.com/business/residential-projects-falter/cid/1726316?ref=business_business-page

Anarock said smaller developers continued to perish or collaborate with the bigger players because of

extreme financial constraints.

On the other hand, private equity inflows in residential real estate remained subdued with major PE

funds focused on the commercial segment.

The only positive development was the announcement of the alternative investment fund of Rs 25,000

crore to facilitate the completion of stuck affordable and mid-segment homes. Moreover, multiple

government sops were announced during the year for the affordable housing segment.

“Of the estimated 2.3 lakh units launched in 2019 in the top seven cities, nearly 40 per cent, or around

92,000 units, were in the affordable segment, followed by the mid segment with a 33 per cent share,”

Anarock said.

The luxury and ultra-luxury segments accounted for the least share with 10 per cent (around 23,000

new units).

Overall housing sales this year saw a modest 4-5 per cent annual growth with over 2.58 lakh homes

sold during the year. Over 2.48 lakh housing units were sold in the previous year.

Housing launches in the year saw 18-20 per cent annual growth, at 2.3 lakh units, Anarock said.

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Minimum 100 home buyers needed for insolvency plea against builders

In another interesting development, the insolvent companies will now be allowed to file for

insolvency against another corporate debtor.

The much hailed accreditation as financial creditors to home buyers now comes with riders. Home

buyers, willing to take the developer to an insolvency court, will now have to ensure that a minimum

of 100 home buyers or 10 per cent of the total home buyers file for bankruptcy against the developer.

The government on Thursday tabled the Insolvency and Bankruptcy Code (Second Amendment) Bill,

2019, in the Lok Sabha, which among other amendments, also provides for the protection of buyers

from criminal proceedings against previous promoters of the bankrupt firm.

"An application for initiating corporate insolvency resolution process shall be filed jointly by not less

than 100 of such creditors in the same class or not less than 10 per cent of the total number of such

creditors in the same class, whichever is less," the bill said, referring to the class of home buyers.

"Provided further that for financial creditors who are allottees under a real estate project, an

application for initiating corporate insolvency resolution process shall be filed jointly by not less than

100 of such allottees under the same real estate project or not less than 10 per cent of the total number

of such allottees under the same real estate project, whichever is less."

As per the bill, all the pending applications by home buyers against the developers, which have not

been admitted will have to meet the new requirements within 30 days of the commencement of the

Act, failing which the application shall be deemed to be withdrawn before its admission.

In another interesting development, the insolvent companies will now be allowed to file for insolvency

against another corporate debtor. This will enable promoters of companyies facing insolvency to

initiate similar proceedings against any entity that may have been responsible for its current state or

otherwise.

Another significant move is the protection against criminal proceedings against the eventual buyers of

a bankrupt company under investigation.

The decision will have a major impact on cases such as the Bhushan Power and Steel insolvency

process whereby JSW Steel emerged the successful bidder, but its transaction was halted by the

National Company Law Appellate Tribunal (NCLAT) after the Enforcement Directorate (ED) attached

Newspaper/Online ET Realty(online)

Date December 13, 2019

Link https://realty.economictimes.indiatimes.com/news/industry/minimum-100-home-buyers-needed-for-insolvency-plea-against-builders/72499902

the properties of the bankrupt BPSL.

The NCLAT had in October put JSW Steel's Rs 19,700 crore payment to acquire Bhushan Power and

Steel (BPSL) on hold and asked the ED to release BPSL's attached properties worth about Rs 4,000

crore. Last week, the NCLAT directed the ED to file an affidavit on developments related to the

attachment of BPSL assets.

"Provided that if a prosecution had been instituted during the corporate insolvency resolution process

against such corporate debtor, it shall stand discharged from the date of approval of the resolution plan

subject to requirements of this sub-section having been fulfilled," the bill said.

It said that no action shall be taken against the property of the corporate debtor in relation to an

offence committed prior to the commencement of the corporate insolvency resolution process of the

corporate debtor, where such property is covered under a resolution plan approved by the Adjudicating

Authority under section 31, which results in the change in control of the corporate debtor to a person,

or sale of liquidation assets under the provisions of Chapter III of Part II of this Code to a person.

The bill also clarifies that a licence, permit, registration, quota, concession, clearances or a similar

grant or right cannot be terminated or suspended during the moratorium period of a company or as

long as the insolvency process continues.

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New legislation to end irregularities in executing Karnataka government

housing schemes

The government has four housing schemes — Basava Housing Scheme, Devaraj Urs Housing

scheme, Prime Minister Awas Yojana and Ambedkar Awas Yojana — with beneficiaries

allowed to apply for houses under all schemes.

The government will enact a legislation that allows filing of criminal charges against housing

department officials involved in corruption and irregularities in executing various government housing

schemes. The bill, which is being prepared, will be placed before the House in the next session.

“We’ve had numerous allegations of irregularities and corruption in selection of beneficiaries and

allotment of houses. The housing department has decided to bring in a law to punish erring officials,”

said housing minister V Somanna.

Somanna went on to say: “In Kalaburagi, Chitradurga and some other districts, a single beneficiary

availed subsidy 10 to12 times showing a single house. Such things must end. Inquiries have already

been initiated into these irregularities and some officials have been suspended.”

The government has four housing schemes — Basava Housing Scheme, Devaraj Urs Housing scheme,

Prime Minister Awas Yojana and Ambedkar Awas Yojana — with beneficiaries allowed to apply for

houses under all schemes.

“Officials are finding it difficult to track beneficiaries under each scheme,” Somanna said. “Except

Ambedkar Awas Yojana, the department plans to merge all four schemes.” He said the department

will create five layouts across the state to provide affordable housing.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/regulatory/new-legislation-to-end-irregularities-in-executing-karnataka-government-housing-schemes/72488775

Aurangabad civic body may launch property tax recovery drive

Several citizens also believe that big defaulters should first be asked to clear their dues, before

the commoners are targeted.

The civic body, under newly appointed municipal commissioner Astik Kumar Pandey, is likely to

launch a rigorous tax recovery drive. Expecting an announcement to this effect, corporators and others

have sought an amnesty scheme for tax defaulters.

Several citizens also believe that big defaulters should first be asked to clear their dues, before the

commoners are targeted.

The cash-strapped Aurangabad Municipal Corporation (AMC) could collect only around one-fourth of

its total recovery target of Rs 450 crore this year. In the 2017-18 financial year, the civic body had

reported recovery percentage of only 20.54% — against the set target of Rs 390 crore. The collection

towards property tax was around 39%, when the target set was Rs 230 crore in 2016-17.

Corporator Raju Vaidya said an amnesty scheme could prove helpful in improving the collection.

“Such a measure had worked last year, and it may work this year too. The scheme is a win-win for the

AMC and citizens,” he said.

Nearly 1.60 lakh properties exist on record within the AMC limits. Of them, a majority are believed to

be residential properties. The tax recovery focus on commercial properties has also been sought.

Corporator Rajendra Janjal said all elected representatives agreed with the civic administration for

improving tax recovery. “A proper tax collection mechanism can ensure the sound financial health of

the civic body. While many citizens pay taxes honestly, those who tend to evade taxes must be

targeted,” he said.

While the collection of dues towards water tax was not part of the amnesty scheme last year, it was

unclear whether the same would be incorporated this time or not.

A senior civic official said emphasis would be on tax recovery. “Ward-wise review is being

undertaken. The necessary action plan would be declared,” he said.

AMC, which falls in the ‘C’ category of the local civic body, came into existence on December 8,

1982. Prior to the formation of the municipal corporation, Aurangabad was ‘A’ class municipal

Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/regulatory/aurangabad-civic-body-may-launch-property-tax-recovery-drive/72483528

council. As many as 18 villages were included in the then newly framed municipal corporation, having

an area of 138.50 square kilometre.

Commercial real estate in Chennai picks-up momentum: Experts

Chennai has traditionally been a market that absorbs around 45 lakh square feet of office space.

The city suddenly witnessed a spike in offtake.

After than 6 years, real estate activity has picked up momentum in Chennai, taking the overall

absorption of commercial space to nearly 60 lakh square feet. The hectic activity in real estate is

because traditional businesses have increased their footprint in the city.

From software services to co-working spaces and the resurrection of electronics manufacturing

services (Foxconn, Salcomp), all have contributed in pushing up real estate activity. Rentals too have

witnessed a 10 to 15% rise and the bullishness could continue for the next 2-3 years, experts said.

Chennai has traditionally been a market that absorbs around 45 lakh square feet of office space. The

city suddenly witnessed a spike in offtake. "The underlying sentiment has turned bullish,"

said Srinivas Anikapatti, senior director at real estate consultancy Knight Frank. "This year has been

very good after the damp squib in 2017 and 2018," he said.

Among the top transactions include Cognizant’s 6.2 lakh square feet in Ozone Techno Park on OMR,

Infosys signing up 2.20 lakh square feet in Pacifica IT Park on OMR and Accenture signing up 2 lakh

square feet in Embassy IT Park on Pallavaram Link road.

"This is the best since 2012-13 and this year has been extremely good for the city. This has happened

on the back of robust demand and the indications are that 2020 will also be a good year," said

Kanchana Krishnan, senior director for Chennai at property consultants JLL India.

The new darlings in the real estate horizon, co-working spaces, have lapped up substantial spaces in

business hubs. For example, Workafella signed up 1.42 lakh square feet in Teynampet. The growth in

this segment could give a leg-up to start-ups in the city.

"The city traditionally was short on supply on good quality office space. But quality office space is

now available," Anikapatti said. Along with the new developments, opportunities for rentals across

various price points starting from `45 per square foot to `110 per square foot is now available — a

feature which had earlier weaned away investments from Chennai to Bengaluru and Hyderabad.

"We are witnessing the first years of a boom cycle returning. We estimate the market will be good for

the next 3 years at least as there is a significant interest from industrial segment," said Rajesh Babu,

director, Asset Advise, real estate consultants.

Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/commercial/commercial-real-estate-in-chennai-picks-up-momentum-experts/72483486

The drivers of the boom are the city’s traditional vanguards, IT & ITES, captive centres for large

transnationals, co-working spaces and the re-churn driven by Foxconn, Salcomp and other smartphone

makers.

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RWA takes up civic issues with Noida Authority

“We held a meeting with officials from Noida authority across civil, horticulture, public health,

water and electrical and mechanical departments,” said Dharmendra Sharma, the RWA general

secretary of sector 34.

The Residents Welfare Association of Sector 34 held a meeting with Noida authority officials on

Wednesday to discuss many civic issues including increase in number of sanitation workers for the

sector, toilets in the sector market, upkeep of green belts, dust free roadsides and cleaning of sewers.

“We held a meeting with officials from Noida authority across civil, horticulture, public health, water

and electrical and mechanical departments,” said Dharmendra Sharma, the RWA general secretary of

sector 34.

Sharma, who is also RWA president Aravalli Apartment sector 34 maintained that a detailed

discussion was held on all the problems related to the sector. “Maintenance of parks, removal of

gazebo huts in the parks, illegal hoardings, posters and paintings etc. in the sector and installation of

sign boards in the society were other key points that were raised in the meeting today,” added Sharma.

“Just as we’ve demanded periodic meeting with police personnel over security issues

of residential sectors, similarly we aim to have regular meeting with authority officials for civic

redress of residential sectors. Wednesday’s meeting was aimed at addressing long pending problems

of sector 34,” said KK Jain, the RWA president of sector 34.

The meeting that was attended by authority officials SC Mishra senior manager and in-charge of

public health department, Mukesh Kumar Vaishya senior manager work circle 5, RK Mathur deputy

director horticulture, Satendra Kumar manager electrical and mechanics and HS Khampa manager

along with Devendra Kumar treasurer RWA sector 34 and other residents Savita Kedar, Mukesh

Sharma, Kanwarpal Singh, Mahendra Singh Nayal, Anek Singh etc. had officials assure early

resolution to all the problems raised in the meeting.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/residential/rwa-takes-up-civic-issues-with-noida-authority/72489528

Godrej Properties to jointly develop three projects in Mumbai,

Bengaluru

Godrej has also bought 8 acres land in Thane to develop 1.10 million sq ft project having

residential apartments with some retail space.

Godrej Properties (GPL) will jointly develop two new projects in Mumbai Metropolitan Region

(MMR) while one will be developed in Bengaluru, the company said in a media release.

In a joint venture with Nisarg Nirman Developers, the company will develop 6.4 acres (approx) land

parcel in Ambernath. It plans to construct a group housing project on approximately 11 lakh sq ft of

development area.

GPL has also entered into a joint venture to develop a township project of over 100 acres in Navi

Mumbai. This project will offer approximately 75 lakh sq ft of development area and will be

developed as a residential development with a retail component.

The company has entered into a joint venture with Universal Builders in KIADB Hardware Park,

Bagalur, North Bengaluru. This project will have approximately 30 lakh sq ft of development area.

GPL has also bought 8 acres land in Thane to develop 1.10 million sq ft project having residential

apartments with some retail space.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/industry/godrej-properties-to-jointly-develop-three-projects-in-mumbai-bengaluru/72490497

Piramal Realty to invest Rs 3,000 crore to develop 22 lakh sq ft in

Mumbai

The project will be developed jointly with Omkar, the company said in a media release.

Piramal Realty (PRPL), the real estate development arm of the Piramal Group, plans to invest Rs

3,000 crore to develop 22 lakh sq ft in Mahim, Mumbai in the next few years.

The project will be developed jointly with Omkar, the company said in a media release.

In November 2019, ICRA downgraded Piramal Realty’s Rs 350-crore debentures to A-(CE) from

A+(CE). The CE in the rating refers to credit enhancement on account of a guarantee from Sri Krishna

Trust (SKT) and PRL Realtors (PRL).

PRPL was set up in 2010 and no longer has any real estate projects. The sole shareholder for PRPL is

Sri GopiKrishna Trust, which is another trust company under the Piramal Group.

Piramal Group and IIFL Wealth Management yesterday said that they have joined hands to create an

Alternative Investment Fund (AIF) platform with a target size of Rs 2,000 crore to provide last-mile

funding of real estate projects.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/industry/piramal-realty-to-invest-rs-3000-crore-to-develop-22-lakh-sq-ft-in-mumbai/72490211

Google leases 4.5 lakh sq ft space from Simpli Work in Gurugram

Earlier this year, the firm had taken up 5,00,000 sq ft of space in Bagmane Capital.

Google has signed a lease deal with flexible office space operator Simpli Work for a 4,50,000 sq ft

area in Gurgaon to expand its operations, people in the know said.

“The office will have a lockin period of three-four years, opposed to over five-seven years in a

conventional office building,” they said, requesting not to be named. The facility, which can seat at

least 4,000 people, will become operational in 2020, they said.

US-headquartered Google is looking for more office space to be able to tap into the local market and

engineering talent. It is close to signing a deal for a 1.2 million sq ft office space in Bagmane RIO in

Bengaluru through a longterm lease.

Earlier this year, the firm had taken up 5,00,000 sq ft of space in Bagmane Capital. The company is

also looking to expand in Hyderabad, where it occupies 4,00,000 sq ft in Knowledge Capital.

Simpli Work refused to comment. An email query sent to Google seeking confir-mation went

unanswered.

“Many large companies are looking at flexible management spaces for the short term to expand, as

these firms do not have to spend on capex. It is beneficial in terms of risk and timeline,” said one of

the persons cited earlier. This move is expected to push up demand for flexible office spaces by six

times to 35% of all office space requirement globally in the next three years, up from just about 5%

now.

Currently, Google has four offices in India, including its country headquarters in Hyderabad and the

recently-acquired 1,00,000 sq ft office space in the First International Financial Centre.

India is an attractive destinations for MNCs looking for high-value work and talent pool. Firms are

looking at 50% conventional space on an over 10-year lease. Separately, 30% space will be on flexible

model and 20% in a co-working environment, as per Knight Frank.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/commercial/google-leases-4-5-lakh-sq-ft-space-from-simpli-work-in-gurugram/72487983

China-based Ucommune files for IPO

The preliminary filing with the U.S. Securities and Exchange Commission did not give any

details of the size of the offering.

China's biggest shared workspace provider Ucommune on Wednesday filed paperwork with the U.S.

securities regulator for an initial public offering, months after WeWork shelved its IPO amid severe

investor concerns over its mounting losses.

The preliminary filing with the U.S. Securities and Exchange Commission did not give any details of

the size of the offering.

Reuters reported in October that Ucommune had filed a confidential prospectus with the SEC, citing

sources.

Ucommune has shared workspaces in 200 locations across 44 cities, led by Beijing, Shanghai, Hong

Kong, Los Angeles and New York, according to its website.

The company posted net loss of 572.8 million yuan ($81.38 million) for the nine months ended Sept.

30 on revenue of 874.6 million yuan.

In contrast, WeWork posted a net loss of over $900 million in the six months ended June 30, on

revenue of $1.54 billion, when it unveiled its finances in August in its IPO filing.

Net losses at WeWork in the third quarter ended Sept. 30 more than doubled to $1.25 billion as the

money-losing shared-office operator added a record number of desks to its global network but was

unable to control rising costs.

WeWork scrapped its IPO in September after it failed to excite investors who raised concerns about its

burgeoning losses and a business model that involves taking long-term leases and renting out spaces

for a short term.

Ucommune plans to list on the New York Stock Exchange under the symbol "UK".

Haitong International and China Renaissance are lead underwriters to the IPO.

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Newspaper/Online ET Realty(online)

Date December 12, 2019

Link https://realty.economictimes.indiatimes.com/news/commercial/china-based-ucommune-files-for-ipo/72488745